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. Cost + Markup






2. 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






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






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






5. 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.






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






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






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






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






10. Net Profit After Taxes/ Net Worth






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






12. 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






13. 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.






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






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






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






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






18. 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.






19. One that is just enough to move the goods






20. Original Retail price- markdown selling price






21. 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






22. Net Profit/ Net Sales






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






24. 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






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






26. Current Assets/ Current Liabilities






27. Total Expenses/ Net Sales






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






30. What the retailer owns in monetary value






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






32. Evaluates the managament of capital






33. 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






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






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






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






37. Revenues received by a retailer






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






39. 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






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. Can be transformed simply and rapidly into cash






42. 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.






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






44. Net dollar markdown/ net dollar selling price






45. (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%






46. Costs involved in running the business






47. Liabilities+ Owner's equity or net worth






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






49. Price is changed (up or down)






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