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. Cost + Markup






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






3. Net Profit/ Net Sales






4. (Cash + Accounts Receivable) / Current Liabilities






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






6. The weather - merchandise is shopworn - economic downturn






7. 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






8. Costs involved in running the business






9. 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






10. 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






11. One that is just enough to move the goods






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






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






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






15. Price Lining - price zones - price ranges






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






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






18. Can be transformed simply and rapidly into cash






19. 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






20. 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.






21. 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






22. Original Retail price- markdown selling price






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






24. Total Expenses/ Net Sales






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






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






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






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






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






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






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






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






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






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






35. Short time - like 1 or 2 day sales






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






37. 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






38. Sales less cost of goods sold






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






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






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






42. 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.






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






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






45. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






47. Liabilities+ Owner's equity or net worth






48. 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.






49. Current Assets/ Current Liabilities






50. Net Profit After Taxes/ Net Worth