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






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






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






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






5. Buying errors - promotion errors - pricing errors - uncontrollable errors






6. 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






7. Current Liabilites/ Net Worth






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






9. Current Assets/ Current Liabilities






10. (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%






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






12. 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.






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






14. 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






15. Financial debts incurred by a retailer






16. The weather - merchandise is shopworn - economic downturn






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






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






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






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






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






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






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






24. Evaluates the managament of capital






25. (Cash + Accounts Receivable) / Current Liabilities






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






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






28. 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.






29. Examines the financial health of a retailer - as one of the best indicators of having too much debt in relationship to net worth. Comparres the money that vendors or banks are risking with the money that the retail owners have invested in their opera






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






31. 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.






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






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






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






35. Net Profit/ Net Sales






36. Costs involved in running the business






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






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






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






40. 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






41. Revenues received by a retailer






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






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






44. 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






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






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






47. Short time - like 1 or 2 day sales






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






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






50. Cost + Markup