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






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






3. Liabilities+ Owner's equity or net worth






4. 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






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






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






7. Net Profit After Taxes/ Total Assets






8. 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






9. Net Profit/ Net Sales






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






11. (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%






12. 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






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






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. Price Lining - price zones - price ranges






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






17. Can be transformed simply and rapidly into cash






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






19. Short time - like 1 or 2 day sales






20. What the retailer owns in monetary value






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






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






23. 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.






24. (Cash + Accounts Receivable) / Current Liabilities






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






26. 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






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






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






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






30. Net dollar markdown/ net dollar selling price






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






32. 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.






33. Financial debts incurred by a retailer






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






35. Price is changed (up or down)






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






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






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






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






40. Current Liabilites/ Net Worth






41. Total Assets/ Net Worth






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






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






44. Buying errors - promotion errors - pricing errors - uncontrollable errors






45. 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.






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






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






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






49. Revenues received by a retailer






50. 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.