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






2. Total Expenses/ Net Sales






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






4. Current Liabilites/ Net Worth






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






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






7. Price Lining - price zones - price ranges






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






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






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






11. 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.






12. Cost + Markup






13. 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






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






15. Short time - like 1 or 2 day sales






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






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






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






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






21. 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.






22. Buying errors - promotion errors - pricing errors - uncontrollable errors






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. Evaluates the managament of capital






25. Original Retail price- markdown selling price






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






27. 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






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






29. Total Assets/ Net Worth






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






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






32. Can be transformed simply and rapidly into cash






33. 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






34. 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






35. One that is just enough to move the goods






36. 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.






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






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






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






40. 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.






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






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






43. Revenues received by a retailer






44. Current Assets/ Current Liabilities






45. Financial debts incurred by a retailer






46. 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






47. 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.






48. 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






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






50. Net Profit After Taxes/ Total Assets