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






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






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






4. Evaluates the managament of capital






5. 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.






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






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






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






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






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






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






12. 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.






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






14. Current Assets/ Current Liabilities






15. Costs involved in running the business






16. Original Retail price- markdown selling price






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






18. 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






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






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






21. (Cash + Accounts Receivable) / Current Liabilities






22. (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%






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






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






25. Sales less cost of goods sold






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






27. Can be transformed simply and rapidly into cash






28. Net Profit After Taxes/ Total Assets






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






30. 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.






31. Price Lining - price zones - price ranges






32. Revenues received by a retailer






33. Net dollar markdown/ net dollar selling price






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






35. 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






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






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






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






39. 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.






40. 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






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






42. 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.






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






44. 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






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






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






47. Net Profit After Taxes/ Net Worth






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






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






50. 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