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. Sales for the period/ average inventory






2. (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%






3. Sales less cost of goods sold






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






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






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






7. Total Assets/ Net Worth






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






9. 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






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






11. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)






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






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






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






15. Ranges of prices that appeals for a particular group of consumers






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






17. 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.






18. 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






19. Cost + Markup






20. Price Lining - price zones - price ranges






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






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






23. Current Liabilites/ Net Worth






24. 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.






25. Short time - like 1 or 2 day sales






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






27. Net Profit After Taxes/ Net Worth






28. Costs involved in running the business






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






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






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






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






33. Original Retail price- markdown selling price






34. Price is changed (up or down)






35. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model






36. Evaluates the managament of capital






37. Net Profit After Taxes/ Total Assets






38. What the retailer owns in monetary value






39. 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.






40. 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






41. Current Assets/ Current Liabilities






42. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory






43. 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






44. Basic premise is to increase profits through more sales without an increase in inventory. Inventory is expressed in cost terms rather than cost percent - because it is related to investment dollars in gross margin - it should be expressed in cost num






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






46. 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.






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






48. 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.






49. Liabilities+ Owner's equity or net worth






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