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






2. Total Assets/ Net Worth






3. 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.






4. What the retailer owns in monetary value






5. 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






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






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






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






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






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






11. Financial debts incurred by a retailer






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






13. 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






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






15. Net Profit After Taxes/ Net Worth






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






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






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






19. 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.






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






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






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






23. Liabilities+ Owner's equity or net worth






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






25. 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






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






27. Costs involved in running the business






28. 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






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






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






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






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






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






34. One that is just enough to move the goods






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






36. 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






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






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






39. Can be transformed simply and rapidly into cash






40. 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






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






42. Evaluates the managament of capital






43. Price is changed (up or down)






44. 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






45. 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






46. (Cash + Accounts Receivable) / Current Liabilities






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






48. Current Liabilites/ Net Worth






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






50. 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