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. Sales less cost of goods sold






2. (Cash + Accounts Receivable) / Current Liabilities






3. Financial debts incurred by a retailer






4. Liabilities+ Owner's equity or net worth






5. Merchandise Available for sale at cost/ Merchandise available for sale at retail






6. 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






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






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






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






10. Evaluates the managament of capital






11. Price is changed (up or down)






12. The weather - merchandise is shopworn - economic downturn






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






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






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. The prices from lowest to highest that are carried within a merchandise category






18. 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






19. 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






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






21. Total Expenses/ Net Sales






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






23. 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.






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






25. 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






26. 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.






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






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






29. Short time - like 1 or 2 day sales






30. 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






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






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






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






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






35. 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






36. Can be transformed simply and rapidly into cash






37. Costs involved in running the business






38. 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.






39. One that is just enough to move the goods






40. Net Profit After Taxes/ Total Assets






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






42. Revenues received by a retailer






43. 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






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






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






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






47. What the retailer owns in monetary value






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






49. Net dollar markdown/ net dollar selling price






50. 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