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. 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.






2. (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%






3. Original Retail price- markdown selling price






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






5. The weather - merchandise is shopworn - economic downturn






6. 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






7. 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






8. Sales less cost of goods sold






9. Total Expenses/ Net Sales






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






11. 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






12. Current Assets/ Current Liabilities






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






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






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






16. 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.






17. 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.






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






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






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






21. Net Profit After Taxes/ Total Assets






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






23. 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






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






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






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






27. (Cash + Accounts Receivable) / Current Liabilities






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






29. 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






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






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






32. Net Profit/ Net Sales






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






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






36. Price is changed (up or down)






37. 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






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






39. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






42. 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.






43. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)






44. Cost + Markup






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






46. Sales for the period/ average inventory






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






48. 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.






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






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