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






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






3. 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






4. Can be transformed simply and rapidly into cash






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






6. Financial debts incurred by a retailer






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






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






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






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






11. 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






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






13. Net Profit After Taxes/ Net Worth






14. 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






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






16. Costs involved in running the business






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






18. Net Profit/ Net Sales






19. Short time - like 1 or 2 day sales






20. Liabilities+ Owner's equity or net worth






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






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






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






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






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






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






27. 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.






28. Price Lining - price zones - price ranges






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






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






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






32. Evaluates the managament of capital






33. 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






34. 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






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






36. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






39. (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%






40. One that is just enough to move the goods






41. Revenues received by a retailer






42. The weather - merchandise is shopworn - economic downturn






43. 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.






44. (Cash + Accounts Receivable) / Current Liabilities






45. 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






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






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






48. Sales less cost of goods sold






49. Dollar markup ($)/ cost price ($)






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