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. Current Assets/ Current Liabilities






2. Sales for the period/ average inventory






3. Liabilities+ Owner's equity or net worth






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






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. Total Expenses/ Net Sales






7. 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.






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






9. Net Profit/ Net Sales






10. Temporary price reduction for a specific period of time for the express purpose of generating store traffic and sales. Prices return to original retail price at end of sale period.






11. Net Profit After Taxes/ Total Assets






12. Total Assets/ Net Worth






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






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






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






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






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






18. 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






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






20. Cost + Markup






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






22. Net dollar markdown/ net dollar selling price






23. 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






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






25. Net Profit After Taxes/ Net Worth






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






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






28. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down






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






30. What the retailer owns in monetary value






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






32. Short time - like 1 or 2 day sales






33. 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.






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






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






36. 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






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






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






39. 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.






40. Costs involved in running the business






41. Sales less cost of goods sold






42. 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






43. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






45. Price Lining - price zones - price ranges






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






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






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






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






50. (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%