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






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






3. (Cash + Accounts Receivable) / Current Liabilities






4. Short time - like 1 or 2 day sales






5. 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






6. 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.






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. Improper displays - merchandise returns due to high pressure selling






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






10. Original Retail price- markdown selling price






11. Net Profit After Taxes/ Net Worth






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






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






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






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






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






17. Liabilities+ Owner's equity or net worth






18. 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.






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






20. Current Liabilites/ Net Worth






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






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






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






25. Can be transformed simply and rapidly into cash






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






27. 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






28. 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.






29. 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






30. 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.






31. 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






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






33. Current Assets/ Current Liabilities






34. 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.






35. 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






36. What the retailer owns in monetary value






37. The weather - merchandise is shopworn - economic downturn






38. Evaluates the managament of capital






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






40. Costs involved in running the business






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






42. Buying errors - promotion errors - pricing errors - uncontrollable errors






43. 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






44. 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.






45. 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






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






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






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






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






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