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






2. What the retailer owns in monetary value






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






4. 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






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






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






7. Liabilities+ Owner's equity or net worth






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






9. Total Expenses/ Net Sales






10. 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






11. One that is just enough to move the goods






12. 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






13. 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.






14. Net Profit/ Net Sales






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






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






17. (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%






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






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






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






21. 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.






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






23. Sales for the period/ average inventory






24. 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






25. 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.






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






27. Can be transformed simply and rapidly into cash






28. Cost + Markup






29. 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






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






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






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






33. 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.






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






35. Buying errors - promotion errors - pricing errors - uncontrollable errors






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. 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






38. Financial debts incurred by a retailer






39. 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






40. Price is changed (up or down)






41. Short time - like 1 or 2 day sales






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






43. 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






44. Current Liabilites/ Net Worth






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






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






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






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






49. (Cash + Accounts Receivable) / Current Liabilities






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