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. (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%






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






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






4. 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






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






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






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






9. 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






10. 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






11. Evaluates the managament of capital






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






13. 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






14. Current Liabilites/ Net Worth






15. Buying errors - promotion errors - pricing errors - uncontrollable errors






16. Revenues received by a retailer






17. 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






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






19. Total Assets/ Net Worth






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






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






22. (Cash + Accounts Receivable) / Current Liabilities






23. The weather - merchandise is shopworn - economic downturn






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






25. Total Expenses/ Net Sales






26. 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






27. Can be transformed simply and rapidly into cash






28. 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.






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






30. 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






31. Net dollar markdown/ net dollar selling price






32. Wrong Merchandise - odd assortment colors/sizes - seasonal goods






33. Sales less cost of goods sold






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






35. Cost + Markup






36. 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






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






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






39. Costs involved in running the business






40. One that is just enough to move the goods






41. Net Profit After Taxes/ Total Assets






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






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






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






45. 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.






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






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






48. What the retailer owns in monetary value






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






50. Original Retail price- markdown selling price