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. Net Profit After Taxes/ Total Assets






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






3. Price is changed (up or down)






4. Revenues received by a retailer






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






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






7. Short time - like 1 or 2 day sales






8. 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






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






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






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






12. 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






13. Original Retail price- markdown selling price






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






15. 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






16. The weather - merchandise is shopworn - economic downturn






17. 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.






18. 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.






19. 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.






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






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. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise






23. Financial debts incurred by a retailer






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






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






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






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






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






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






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






31. 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






32. Total Expenses/ Net Sales






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






34. Costs involved in running the business






35. 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






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






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






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






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






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






41. Current Assets/ Current Liabilities






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






43. 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






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






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






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






49. Evaluates the managament of capital






50. 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