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. Total Assets/ Net Worth






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






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






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






5. 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






6. Original Retail price- markdown selling price






7. 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






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






9. Cost + Markup






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






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






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






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






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






15. 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






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






17. 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






18. 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






19. Price Lining - price zones - price ranges






20. Sales less cost of goods sold






21. 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.






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






23. 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.






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






25. Net Profit After Taxes/ Total Assets






26. One that is just enough to move the goods






27. The weather - merchandise is shopworn - economic downturn






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






29. 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






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






31. Total Expenses/ Net Sales






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






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






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






35. 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






36. Short time - like 1 or 2 day sales






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






38. (Cash + Accounts Receivable) / Current Liabilities






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






40. Evaluates the managament of capital






41. Current Assets/ Current Liabilities






42. Financial debts incurred by a retailer






43. 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






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






45. Net Profit/ Net Sales






46. Net Profit After Taxes/ Net Worth






47. Can be transformed simply and rapidly into cash






48. 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






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






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