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. Total Expenses/ Net Sales






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






3. Total Assets/ Net Worth






4. Evaluates the managament of capital






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






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






7. Current Liabilites/ Net Worth






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






9. Price Lining - price zones - price ranges






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






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






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






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






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






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






16. Financial debts incurred by a retailer






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






18. 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.






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






20. Liabilities+ Owner's equity or net worth






21. 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.






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






23. 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.






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






25. Costs involved in running the business






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






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






28. Current Assets/ Current Liabilities






29. 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.






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






31. 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






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






33. 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






34. (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%






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






36. 1. Determine merchandise available for sale at both cost and retail prices. 2.Calculate the cost to retail complement or percentage relationship of the cost of merchandise to the selling price. 3. Subtract markdowns taken during the period. 4. Determ






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






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






39. 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






40. Short time - like 1 or 2 day sales






41. 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






42. 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.






43. 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






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






45. Buying errors - promotion errors - pricing errors - uncontrollable errors






46. Can be transformed simply and rapidly into cash






47. The weather - merchandise is shopworn - economic downturn






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






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






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