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






2. 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.






3. Short time - like 1 or 2 day sales






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






5. Price Lining - price zones - price ranges






6. One that is just enough to move the goods






7. (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%






8. 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






9. 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






10. Current Assets/ Current Liabilities






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






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






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






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






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






16. 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.






17. Costs involved in running the business






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






19. (Cash + Accounts Receivable) / Current Liabilities






20. Financial debts incurred by a retailer






21. 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.






22. Sales less cost of goods sold






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






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






25. Revenues received by a retailer






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






27. 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






28. 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






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






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






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






32. 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






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






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






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






36. 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






37. Can be transformed simply and rapidly into cash






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






39. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






41. Original Retail price- markdown selling price






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






43. Current Liabilites/ Net Worth






44. 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






45. Liabilities+ Owner's equity or net worth






46. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit






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






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






49. 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.






50. 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