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. Liabilities+ Owner's equity or net worth






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






3. 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.






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






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. Net Profit After Taxes/ Total Assets






7. The weather - merchandise is shopworn - economic downturn






8. Sales less cost of goods sold






9. Price Lining - price zones - price ranges






10. 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.






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






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






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






14. One that is just enough to move the goods






15. 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.






16. 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






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






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






19. Sales for the period/ average inventory






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






21. 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






22. (gross margin % x Turnover) / (100%-markup %)






23. Financial debts incurred by a retailer






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






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






26. (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%






27. (Cash + Accounts Receivable) / Current Liabilities






28. 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






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






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






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






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






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. 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.






35. Can be transformed simply and rapidly into cash






36. Net Profit/ Net Sales






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






38. 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






39. 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






40. Net dollar markdown/ net dollar selling price






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






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






43. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






45. 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






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






47. 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






48. What the retailer owns in monetary value






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






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