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






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






3. Total Expenses/ Net Sales






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






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






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






7. Evaluates the managament of capital






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






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






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






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






12. Price is changed (up or down)






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






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






15. (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%






16. 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.






17. Can be transformed simply and rapidly into cash






18. 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






19. 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.






20. Net Profit After Taxes/ Total Assets






21. Sales for the period/ average inventory






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






23. 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.






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






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






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






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






28. Liabilities+ Owner's equity or net worth






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






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






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






32. 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






33. 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






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






35. Revenues received by a retailer






36. 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.






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






38. 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.






39. Cost + Markup






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






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






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






43. Financial debts incurred by a retailer






44. Net dollar markdown/ net dollar selling price






45. 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






46. (Cash + Accounts Receivable) / Current Liabilities






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






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






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






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