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






3. 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






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






5. Current Assets/ Current Liabilities






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






7. 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






8. Sales less cost of goods sold






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






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






11. Cost + Markup






12. 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






13. 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






14. Current Liabilites/ Net Worth






15. 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






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






17. Original Retail price- markdown selling price






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






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






20. One that is just enough to move the goods






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






22. Net Profit After Taxes/ Net Worth






23. 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






24. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






26. Costs involved in running the business






27. (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%






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






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






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






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






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






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






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






35. 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.






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






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






38. 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.






39. Total Assets/ Net Worth






40. What the retailer owns in monetary value






41. Can be transformed simply and rapidly into cash






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






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






44. 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.






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






46. 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






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






48. Price is changed (up or down)






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






50. Liabilities+ Owner's equity or net worth