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






2. Net Profit/ Net Sales






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






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






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






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






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






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






9. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






11. Price Lining - price zones - price ranges






12. Sales less cost of goods sold






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






14. Total Expenses/ Net Sales






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






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






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






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






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






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






21. 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






22. 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






23. Revenues received by a retailer






24. Dollar markup ($)/ cost price ($)






25. 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






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






27. 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






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. 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






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






31. 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






32. Evaluates the managament of capital






33. 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






34. Liabilities+ Owner's equity or net worth






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






36. Original Retail price- markdown selling price






37. Costs involved in running the business






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






39. 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






40. The weather - merchandise is shopworn - economic downturn






41. 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






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






43. Net Profit After Taxes/ Total Assets






44. What the retailer owns in monetary value






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






46. 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






47. Price is changed (up or down)






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






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






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