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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. 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






2. 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






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






4. 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.






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






6. (Cash + Accounts Receivable) / Current Liabilities






7. 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.






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






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






10. Price is changed (up or down)






11. What the retailer owns in monetary value






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






13. Buying errors - promotion errors - pricing errors - uncontrollable errors






14. Net dollar markdown/ net dollar selling price






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






16. Price Lining - price zones - price ranges






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






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






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






20. Sales less cost of goods sold






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. 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.






23. 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






24. Sales for the period/ average inventory






25. Can be transformed simply and rapidly into cash






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






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






28. 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






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






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






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






32. Net Profit After Taxes/ Total Assets






33. Total Assets/ Net Worth






34. Total Expenses/ Net Sales






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






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






37. Liabilities+ Owner's equity or net worth






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






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






40. Cost + Markup






41. Current Assets/ Current Liabilities






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






43. Evaluates the managament of capital






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






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






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






47. 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






48. Short time - like 1 or 2 day sales






49. 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






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







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