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. Can be transformed simply and rapidly into cash






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






3. 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.






4. 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






5. Price is changed (up or down)






6. The energizing force that fuels and sustains our economic system






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






8. Net Profit After Taxes/ Total Assets






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






11. Buying errors - promotion errors - pricing errors - uncontrollable errors






12. 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.






13. (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%






14. Total Assets/ Net Worth






15. 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






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






17. Price Lining - price zones - price ranges






18. 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.






19. Total Expenses/ Net Sales






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






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






22. One that is just enough to move the goods






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






24. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item






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






26. Current Liabilites/ Net Worth






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






28. Merchandise will sell at highest price longer period of time - appear exclusive - sale of goods at regular price is not disrupted - greater amount of goods can be accumulated and then marked down.






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






30. Liabilities+ Owner's equity or net worth






31. 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






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






33. Financial debts incurred by a retailer






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






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






36. (Cash + Accounts Receivable) / Current Liabilities






37. Sales less cost of goods sold






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






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






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






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






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






43. 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






44. 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.






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






46. The weather - merchandise is shopworn - economic downturn






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






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






49. 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






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