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. Liabilities+ Owner's equity or net worth






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






3. One that is just enough to move the goods






4. Total Expenses/ Net Sales






5. Sales for the period/ average inventory






6. The weather - merchandise is shopworn - economic downturn






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






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






9. 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






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






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






12. 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






13. 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






14. 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






15. Can be transformed simply and rapidly into cash






16. Financial debts incurred by a retailer






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






18. Short time - like 1 or 2 day sales






19. Price is changed (up or down)






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






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






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






23. 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.






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






25. Net Profit After Taxes/ Net Worth






26. Current Liabilites/ Net Worth






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






28. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






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






32. 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.






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






34. 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






35. What the retailer owns in monetary value






36. Evaluates the managament of capital






37. Cost + Markup






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






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






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






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






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






43. Costs involved in running the business






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






45. 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.






46. 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






47. 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






48. Revenues received by a retailer






49. Net dollar markdown/ net dollar selling price






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