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






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






3. The largest sum of money in current assets. Can be presented in either cost or retail terms. Should be purchased for a short period of time - as products lose monetary value over time and are subject to markdowns.






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






5. Having the right merchandise - at the right time - for the right price - in the right place






6. Ensures that there is enough cash to pay debts. Any time the ratio is colse to 1 - the retailer is said to be in a liquid position.






7. Cost + Markup






8. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.






9. (Cash + Accounts Receivable) / Current Liabilities






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






11. Revenues received by a retailer






12. 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






13. Dollar markup ($)/ retail price ($)






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






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






16. Net Profit After Taxes/ Total Assets






17. 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






18. Net Profit/ Net Sales






19. Total Assets/ Net Worth






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






21. The awareness of the consumer to what they perceive to be the window of cost within which they will buy a particular product or service






22. The number of items remaining in stock x dollar markdown






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






24. Current Liabilites/ Net Worth






25. Wrong Merchandise - odd assortment colors/sizes - seasonal goods






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






27. Total Expenses/ Net Sales






28. Examines the financial health of a retailer - as one of the best indicators of having too much debt in relationship to net worth. Comparres the money that vendors or banks are risking with the money that the retail owners have invested in their opera






29. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down






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






31. 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






32. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.






33. Price reduction for merchandise that has not lived up to buyers' expectations. Includes broken assortments of merchandise - merchandise lines that buyers no longer want to carry - shopworn goods - items that haven't sold because of an event beyond bu






34. The weather - merchandise is shopworn - economic downturn






35. First price or Manufacturers suggestet Retal Price (MSRP)






36. Costs involved in running the business






37. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit






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






39. Merchandise Available for sale at cost/ Merchandise available for sale at retail






40. Financial debts incurred by a retailer






41. Total Markup on all goods on hand/ retail price of all goods on hand






42. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)






43. 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.






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






45. What the retailer owns in monetary value






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






47. (planned expenses + planned operating profit + planned stock shortages + markdowns + employee and customer discounts) / (planned net sales + stock shortages + markdowns + employee and customer discounts) x 100%






48. Dollar markup ($)/ cost price ($)






49. 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






50. 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