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 Assets/ Net Worth






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






3. 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






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






5. 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.






6. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






9. Current Liabilites/ Net Worth






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






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






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






13. The weather - merchandise is shopworn - economic downturn






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






15. Costs involved in running the business






16. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.






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






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






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






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






21. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down






22. 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






23. Total Expenses/ Net Sales






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






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






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






27. 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






28. 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






29. Sales less cost of goods sold






30. Cost + Markup






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






32. Price is changed (up or down)






33. 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






34. Financial debts incurred by a retailer






35. 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.






36. 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.






37. 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






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






39. Can be transformed simply and rapidly into cash






40. 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






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






42. (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%






43. Current Assets/ Current Liabilities






44. 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.






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






46. 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.






47. Liabilities+ Owner's equity or net worth






48. Revenues received by a retailer






49. Net Profit After Taxes/ Total Assets






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