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. Financial debts incurred by a retailer






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






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






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






5. 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.






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






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






8. Short time - like 1 or 2 day sales






9. 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.






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






11. Total Assets/ Net Worth






12. 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






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






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






15. 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






16. 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






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






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






19. Price Lining - price zones - price ranges






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






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






22. 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.






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






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






25. Cost + Markup






26. Price is changed (up or down)






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






28. What the retailer owns in monetary value






29. The weather - merchandise is shopworn - economic downturn






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






31. 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.






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






33. Basic premise is to increase profits through more sales without an increase in inventory. Inventory is expressed in cost terms rather than cost percent - because it is related to investment dollars in gross margin - it should be expressed in cost num






34. Net Profit After Taxes/ Net Worth






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






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






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






38. 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






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






40. Revenues received by a retailer






41. Evaluates the managament of capital






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






43. Original Retail price- markdown selling price






44. (Cash + Accounts Receivable) / Current Liabilities






45. 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






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






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






48. 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






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






50. Current Liabilites/ Net Worth