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 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






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






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






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






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






6. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






8. 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






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






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






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






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






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






14. 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.






15. 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.






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






17. Financial debts incurred by a retailer






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






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






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






21. Price Lining - price zones - price ranges






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






23. (Cash + Accounts Receivable) / Current Liabilities






24. (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%






25. 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






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






27. 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






28. Can be transformed simply and rapidly into cash






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






30. Total Expenses/ Net Sales






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






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






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






34. Original Retail price- markdown selling price






35. 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






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






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






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






39. Sales for the period/ average inventory






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






41. 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.






42. Current Assets/ Current Liabilities






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






44. Total Assets/ Net Worth






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






46. The weather - merchandise is shopworn - economic downturn






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






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






49. Net Profit After Taxes/ Net Worth






50. 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