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. Current Liabilites/ Net Worth






2. What the retailer owns in monetary value






3. 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






4. 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






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






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






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






8. 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






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






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






11. Cost + Markup






12. 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.






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






14. 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






15. Sales for the period/ average inventory






16. 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






17. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






20. Price Lining - price zones - price ranges






21. Costs involved in running the business






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






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






25. 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.






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






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






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






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






30. Net dollar markdown/ net dollar selling price






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






32. Short time - like 1 or 2 day sales






33. 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






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






35. Can be transformed simply and rapidly into cash






36. Financial debts incurred by a retailer






37. One that is just enough to move the goods






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






39. Total Expenses/ Net Sales






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






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






42. Revenues received by a retailer






43. Evaluates the managament of capital






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






45. 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.






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






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






48. 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.






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






50. 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