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. The weather - merchandise is shopworn - economic downturn






2. Can be transformed simply and rapidly into cash






3. 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






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






5. 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.






6. Cost + Markup






7. Net Profit After Taxes/ Net Worth






8. Net dollar markdown/ net dollar selling price






9. 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.






10. 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.






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






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






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






14. 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.






15. Financial debts incurred by a retailer






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






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






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






19. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.






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






21. Net Profit/ Net Sales






22. Evaluates the managament of capital






23. 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.






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






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. Costs involved in running the business






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






28. Sales for the period/ average inventory






29. What the retailer owns in monetary value






30. Revenues received by a retailer






31. 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.






32. Price is changed (up or down)






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






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






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






36. 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






37. Original Retail price- markdown selling price






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






39. 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






40. Buying errors - promotion errors - pricing errors - uncontrollable errors






41. 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






42. Sales less cost of goods sold






43. 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






44. 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






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






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






47. Total Expenses/ Net Sales






48. 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






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






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