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. 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.






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






3. 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






4. 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






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. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.






8. 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.






9. 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






10. Revenues received by a retailer






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






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






13. The retailers financial condition at a specific point in time






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






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






16. (Cash + Accounts Receivable) / Current Liabilities






17. 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






18. Net Profit After Taxes/ Net Worth






19. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.






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






21. 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.






22. 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






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






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






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






26. Total Expenses/ Net Sales






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






28. 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.






29. Sales less cost of goods sold






30. 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






31. Costs involved in running the business






32. Sales for the period/ average inventory






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






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






35. One that is just enough to move the goods






36. Liabilities+ Owner's equity or net worth






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






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






39. Short time - like 1 or 2 day sales






40. Original Retail price- markdown selling price






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






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






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






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






45. Total Assets/ Net Worth






46. The weather - merchandise is shopworn - economic downturn






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






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






49. 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






50. Net Profit/ Net Sales