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






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






3. 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






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. The retailers financial condition at a specific point in time






6. 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






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






8. (Cash + Accounts Receivable) / Current Liabilities






9. Net dollar markdown/ net dollar selling price






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






11. Current Assets/ Current Liabilities






12. Current Liabilites/ Net Worth






13. Short time - like 1 or 2 day sales






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






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






16. 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.






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






18. 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






19. 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.






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






21. 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






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






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






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






25. Costs involved in running the business






26. Total Assets/ Net Worth






27. Revenues received by a retailer






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






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






30. 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






31. 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.






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






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






34. Sales less cost of goods sold






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






36. 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






37. One that is just enough to move the goods






38. Sales for the period/ average inventory






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






40. 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






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






42. Liabilities+ Owner's equity or net worth






43. Evaluates the managament of capital






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






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






46. 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.






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






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






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






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