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. 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






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






3. Original Retail price- markdown selling price






4. Costs involved in running the business






5. 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






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






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






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






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






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






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






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






13. 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






14. Short time - like 1 or 2 day sales






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






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






17. Total Assets/ Net Worth






18. 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






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






20. Net Profit/ Net Sales






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






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






23. Cost + Markup






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






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






26. Current Liabilites/ Net Worth






27. 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.






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






29. 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






30. Sales less cost of goods sold






31. Net dollar markdown/ net dollar selling price






32. 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






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






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






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






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






37. 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






38. Net Profit After Taxes/ Total Assets






39. 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






40. 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






41. Total Expenses/ Net Sales






42. (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%






43. 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






44. Evaluates the managament of capital






45. 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






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






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






48. 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






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






50. 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.