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. 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






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






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. Current Assets/ Current Liabilities






6. 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






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






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






9. Price is changed (up or down)






10. Sales less cost of goods sold






11. Sales for the period/ average inventory






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






14. 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






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






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






17. Total Assets/ Net Worth






18. Net Profit/ Net Sales






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






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






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






22. 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






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






24. 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






25. 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






26. Short time - like 1 or 2 day sales






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






28. Cost + Markup






29. Costs involved in running the business






30. Net Profit After Taxes/ Total Assets






31. 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.






32. Net dollar markdown/ net dollar selling price






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






34. Evaluates the managament of capital






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






36. 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






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






38. 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.






39. Total Expenses/ Net Sales






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






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






42. 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






43. 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.






44. (Cash + Accounts Receivable) / Current Liabilities






45. The weather - merchandise is shopworn - economic downturn






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






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






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






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






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