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 weather - merchandise is shopworn - economic downturn






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






3. 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.






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






5. Total Expenses/ Net Sales






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






7. 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






8. 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.






9. 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






10. Cost + Markup






11. 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






12. Net Profit After Taxes/ Net Worth






13. Price is changed (up or down)






14. 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






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






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






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






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






19. Net dollar markdown/ net dollar selling price






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






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






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






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






24. What the retailer owns in monetary value






25. Liabilities+ Owner's equity or net worth






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






27. Sales for the period/ average inventory






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






29. Current Assets/ Current Liabilities






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






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






32. (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%






33. Short time - like 1 or 2 day sales






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






35. 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.






36. 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






37. Revenues received by a retailer






38. 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.






39. 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






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






41. Current Liabilites/ Net Worth






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






43. 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.






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






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






46. 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.






47. Sales less cost of goods sold






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






49. Net Profit After Taxes/ Total Assets






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