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. Sales for the period/ average inventory






2. 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.






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






4. Net dollar markdown/ net dollar selling price






5. Cost + Markup






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






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






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






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






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






11. Liabilities+ Owner's equity or net worth






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






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






14. 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






15. Current Liabilites/ Net Worth






16. 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






17. Current Assets/ Current Liabilities






18. 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






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






20. Original Retail price- markdown selling price






21. Evaluates the managament of capital






22. Total Expenses/ Net Sales






23. 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






24. Price Lining - price zones - price ranges






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






26. 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.






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






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. Sales less cost of goods sold






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






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






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






33. Financial debts incurred by a retailer






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






35. Revenues received by a retailer






36. Net Profit After Taxes/ Total Assets






37. Net Profit After Taxes/ Net Worth






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






39. Can be transformed simply and rapidly into cash






40. 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.






41. 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






42. 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






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






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






45. 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.






46. 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






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






48. Price is changed (up or down)






49. 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.






50. The weather - merchandise is shopworn - economic downturn