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. 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






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






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






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






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. Short time - like 1 or 2 day sales






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






8. Cost + Markup






9. The weather - merchandise is shopworn - economic downturn






10. 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.






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






12. Net Profit/ Net Sales






13. One that is just enough to move the goods






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






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






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






17. (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%






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






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






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






21. 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.






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






23. Current Liabilites/ Net Worth






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






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






26. Sales less cost of goods sold






27. What the retailer owns in monetary value






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






29. 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.






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






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






32. Price Lining - price zones - price ranges






33. 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.






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






35. 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






36. Sales for the period/ average inventory






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






38. 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.






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






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






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






42. 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






43. Net Profit After Taxes/ Net Worth






44. (Cash + Accounts Receivable) / Current Liabilities






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






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






47. Financial debts incurred by a retailer






48. Original Retail price- markdown selling price






49. 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






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