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. 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.






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






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






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






5. 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.






6. Current Liabilites/ Net Worth






7. 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






8. Revenues received by a retailer






9. 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






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






11. 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






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






13. 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






14. Sales for the period/ average inventory






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






16. Liabilities+ Owner's equity or net worth






17. One that is just enough to move the goods






18. 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.






19. Total Assets/ Net Worth






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






21. 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






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






23. 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






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






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






26. Original Retail price- markdown selling price






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






28. Short time - like 1 or 2 day sales






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






30. (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%






31. 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.






32. Total Expenses/ Net Sales






33. Net Profit After Taxes/ Total Assets






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






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






36. Price is changed (up or down)






37. (Cash + Accounts Receivable) / Current Liabilities






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






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






40. Cost + Markup






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






42. Costs involved in running the business






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






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






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






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






47. Current Assets/ Current Liabilities






48. 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






49. 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






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