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. Costs involved in running the business






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






3. Evaluates the managament of capital






4. What the retailer owns in monetary value






5. 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






6. Original Retail price- markdown selling price






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






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






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






10. Can be transformed simply and rapidly into cash






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






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






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






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






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






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






17. Financial debts incurred by a retailer






18. Current Liabilites/ Net Worth






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






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






21. 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






22. 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.






23. 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






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






25. 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.






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






27. Net dollar markdown/ net dollar selling price






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






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






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






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






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






33. Net Profit/ Net Sales






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






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






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






37. Short time - like 1 or 2 day sales






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






39. Total Expenses/ Net Sales






40. 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






41. 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






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






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






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






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






46. 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






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






48. Current Assets/ Current Liabilities






49. 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.






50. Sales for the period/ average inventory