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. 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.






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






3. 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.






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






5. Current Assets/ Current Liabilities






6. 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






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






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






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






10. 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.






11. Total Expenses/ Net Sales






12. 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






13. Cost + Markup






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






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






16. 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






17. Original Retail price- markdown selling price






18. Revenues received by a retailer






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






20. Sales for the period/ average inventory






21. 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






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






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






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






25. (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%






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






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






28. 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






29. 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






30. 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






31. (Cash + Accounts Receivable) / Current Liabilities






32. 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.






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






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






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






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






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






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






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






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






41. Price is changed (up or down)






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






43. 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.






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






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






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






47. 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






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






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






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