Test your basic knowledge |

Retail Financials

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down






2. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)






3. 1. Determine merchandise available for sale at both cost and retail prices. 2.Calculate the cost to retail complement or percentage relationship of the cost of merchandise to the selling price. 3. Subtract markdowns taken during the period. 4. Determ






4. Indicates gross margin derived from the sales of merchandise and it's ability to cover operating expenses. Helps a retailer determine how much rent they should pay - what salary the owner should draw - and how much they should pay their associates.






5. Buying errors - promotion errors - pricing errors - uncontrollable errors






6. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.






7. Assets collected within one year. Due to the widespread use of credit cards - AR for retailers has diminished with exceptions such as lay-a-way.






8. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.






9. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down






10. Current Liabilites/ Net Worth






11. Promotional markdown that involves selling at or near cost for promotional purposes






12. Based on a calculation commonly represented as a percentage - comparing the amount of inventory a retailer receives from a manufacturer or supplier against what is actually sold to the consumer






13. In the Cost Method. Merchandise most recently purchased is assumed to have been sold first. Therefore - the ending inventory reflects the items in stock for the longest period of time. Produces lowest ending inventory value and highest cost of goods






14. Financial debts incurred by a retailer






15. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.






16. The cost of merchandise that was sold (including the method that was used to determine cost)






17. Net Profit After Taxes/ Net Worth






18. The higher the ratio the quicker current liabilities can be paid. This ratio also indicates the margin of safety a retailer has on hand to cover possible shrinkages






19. In Cost Method. Merchandise sold during a time period is assumed to be sold in the order the merchandise was received. Merchandise on hand for the longest period of time is sold first. Therefore - the ending inventory reflects the items in stock for






20. Can be transformed simply and rapidly into cash






21. To make a profit buyers must set an appropriate price considering many variables and using past experience and knowledge of future trends. A markup on an item does not typically remain constant.






22. Improper displays - merchandise returns due to high pressure selling






23. Cost Price/ (100%-markup %)






24. Net Profit After Taxes/ Total Assets






25. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes






26. Sales for the period/ average inventory






27. Sales less cost of goods sold






28. Revenues received by a retailer






29. The retailers financial condition at a specific point in time






30. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.






31. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)






32. Original Retail price- markdown selling price






33. Amount of markdown usually less - take the loss early will be easier - strengthen goodwill - replenish stock in lower price lines - leads to higher stock turnover - higher likelihood merchandise will sell in a timely manner






34. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)






35. The weather - merchandise is shopworn - economic downturn






36. Inventory Valuation Method where the cost to the retailer of each item purchased from a vendor is entered in the accounting system and/or placed on the merchandise item or on it's package. At times - freight charges are built into the cost. Coding of






37. Evaluates the managament of capital






38. Total Expenses/ Net Sales






39. Cash Received by the retailer-cash leaving the retailer






40. Usually lower than original - but held for longer period






41. The prices from lowest to highest that are carried within a merchandise category






42. Price Lining - price zones - price ranges






43. AKA Return on Sales - Profit analysis; Indicates the extend to which retailers have the ability to cover their expenses and earn a profit - as well as a buyers ability to purchase the correct assortment of merchandise






44. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise






45. Priced too high initially - priced too low - selling price of competitors






46. Net dollar markdown/ net dollar selling price






47. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented.






48. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.






49. Temporary price reduction for a specific period of time for the express purpose of generating store traffic and sales. Prices return to original retail price at end of sale period.






50. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)