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






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






3. Current Liabilites/ Net Worth






4. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






6. Sales for the period/ average inventory






7. 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.






8. 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






9. Total Assets/ Net Worth






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






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






12. Price is changed (up or down)






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






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






15. Current Assets/ Current Liabilities






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






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






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






19. 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.






20. 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






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






22. Price Lining - price zones - price ranges






23. Net dollar markdown/ net dollar selling price






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






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






26. Cost + Markup






27. Net Profit After Taxes/ Total Assets






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






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






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






31. The weather - merchandise is shopworn - economic downturn






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






33. (Cash + Accounts Receivable) / Current Liabilities






34. 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.






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






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






37. Original Retail price- markdown selling price






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






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






40. 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.






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






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






43. (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%






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






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






46. 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






47. 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






48. Net Profit After Taxes/ Net Worth






49. Net Profit/ Net Sales






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