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






2. What the retailer owns in monetary value






3. Current Assets/ Current Liabilities






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






5. 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






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






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






8. First price or Manufacturers suggestet Retal Price (MSRP)






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






10. Evaluates the managament of capital






11. 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






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






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






14. Price is changed (up or down)






15. (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%






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






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






18. Net dollar markdown/ net dollar selling price






19. 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.






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






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






22. Liabilities+ Owner's equity or net worth






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






24. 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






25. The weather - merchandise is shopworn - economic downturn






26. Net Profit/ Net Sales






27. Price Lining - price zones - price ranges






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






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






30. Total Expenses/ Net Sales






31. Short time - like 1 or 2 day sales






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






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






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






35. Can be transformed simply and rapidly into cash






36. Original Retail price- markdown selling price






37. 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






38. 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






39. 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






40. 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






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






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






43. 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.






44. Current Liabilites/ Net Worth






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






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






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






48. Financial debts incurred by a retailer






49. 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.






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