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. 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.






2. (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%






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






4. 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






5. What the retailer owns in monetary value






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






7. Sales less cost of goods sold






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






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






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






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






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






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






14. Can be transformed simply and rapidly into cash






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






16. Buying errors - promotion errors - pricing errors - uncontrollable errors






17. (Cash + Accounts Receivable) / Current Liabilities






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






19. Total Expenses/ Net Sales






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






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






22. 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






23. Current Assets/ Current Liabilities






24. Current Liabilites/ Net Worth






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






26. Short time - like 1 or 2 day sales






27. 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.






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






29. Financial debts incurred by a retailer






30. Cost + Markup






31. 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






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






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






34. Price Lining - price zones - price ranges






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






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






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






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






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






40. Revenues received by a retailer






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






42. Net Profit After Taxes/ Total Assets






43. 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.






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






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






46. 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






47. 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.






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






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






50. 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