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






2. Net Profit After Taxes/ Total Assets






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






4. Net dollar markdown/ net dollar selling price






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






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






7. Current Liabilites/ Net Worth






8. 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.






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






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. Cost + Markup






12. Sales for the period/ average inventory






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






14. 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.






15. 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






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






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






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






19. 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






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






21. One that is just enough to move the goods






22. 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






23. Can be transformed simply and rapidly into cash






24. Costs involved in running the business






25. Net Profit/ Net Sales






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






27. 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






28. What the retailer owns in monetary value






29. Assets collected within one year. Due to the widespread use of credit cards - AR for retailers has diminished with exceptions such as lay-a-way.






30. Financial debts incurred by a retailer






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






32. 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






33. Total Expenses/ Net Sales






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






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






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






37. Liabilities+ Owner's equity or net worth






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. The energizing force that fuels and sustains our economic system






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






41. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






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






45. 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






46. 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.






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






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






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






50. (Cash + Accounts Receivable) / Current Liabilities