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. (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%






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






3. 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






4. Current Assets/ Current Liabilities






5. 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






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






7. Net Profit After Taxes/ Total Assets






8. Net Profit After Taxes/ Net Worth






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






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






11. Total Expenses/ Net Sales






12. Evaluates the managament of capital






13. 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.






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






15. 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






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






17. Original Retail price- markdown selling price






18. 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.






19. 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.






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






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






22. Sales less cost of goods sold






23. Net dollar markdown/ net dollar selling price






24. Short time - like 1 or 2 day sales






25. 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






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






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






28. The cost of merchandise that was sold (including the method that was used to determine cost)






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






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






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






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






33. Cost + Markup






34. Revenues received by a retailer






35. One that is just enough to move the goods






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






37. Costs involved in running the business






38. Buying errors - promotion errors - pricing errors - uncontrollable errors






39. The weather - merchandise is shopworn - economic downturn






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






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






42. Current Liabilites/ Net Worth






43. 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






44. 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






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






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






47. 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.






48. (Cash + Accounts Receivable) / Current Liabilities






49. 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






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