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. 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






2. Sales for the period/ average inventory






3. The weather - merchandise is shopworn - economic downturn






4. Sales less cost of goods sold






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






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






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






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






9. 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.






10. Can be transformed simply and rapidly into cash






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






12. 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.






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






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






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






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






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






18. Price reduction for merchandise that has not lived up to buyers' expectations. Includes broken assortments of merchandise - merchandise lines that buyers no longer want to carry - shopworn goods - items that haven't sold because of an event beyond bu






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






20. Evaluates the managament of capital






21. Liabilities+ Owner's equity or net worth






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






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






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






25. Short time - like 1 or 2 day sales






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






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






28. 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






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






30. Net Profit After Taxes/ Total Assets






31. Costs involved in running the business






32. 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.






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. 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.






36. 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.






37. Total Expenses/ Net Sales






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






39. Net dollar markdown/ net dollar selling price






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






41. Original Retail price- markdown selling price






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






43. Net Profit After Taxes/ Net Worth






44. 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






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






46. Net Profit/ Net Sales






47. Current Liabilites/ Net Worth






48. One that is just enough to move the goods






49. Current Assets/ Current Liabilities






50. (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%