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. Costs involved in running the business






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






3. 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.






4. Net Profit After Taxes/ Total Assets






5. Liabilities+ Owner's equity or net worth






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






7. The largest sum of money in current assets. Can be presented in either cost or retail terms. Should be purchased for a short period of time - as products lose monetary value over time and are subject to markdowns.






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






9. 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.






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






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






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






13. Cost + Markup






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






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






16. 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






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






19. Net Profit/ Net Sales






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






21. Current Liabilites/ Net Worth






22. 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






23. 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






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






25. Original Retail price- markdown selling price






26. Revenues received by a retailer






27. Net Profit After Taxes/ Net Worth






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






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






30. Evaluates the managament of capital






31. 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.






32. 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.






33. Total Assets/ Net Worth






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






35. Sales for the period/ average inventory






36. Price Lining - price zones - price ranges






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






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






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






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






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






42. 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






43. What the retailer owns in monetary value






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






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






46. 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






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






48. 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






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. 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.