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






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






4. (Cash + Accounts Receivable) / Current Liabilities






5. What the retailer owns in monetary value






6. Cost + Markup






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. 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.






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






10. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






13. Net Profit After Taxes/ Net Worth






14. 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






15. 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






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






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






18. 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






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






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






21. The number of items remaining in stock x dollar markdown






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






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






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






25. 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






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






27. Original Retail price- markdown selling price






28. Net Profit/ Net Sales






29. One that is just enough to move the goods






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






31. Price Lining - price zones - price ranges






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






33. 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.






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






36. Evaluates the managament of capital






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






38. Current Assets/ Current Liabilities






39. The weather - merchandise is shopworn - economic downturn






40. Price is changed (up or down)






41. Net dollar markdown/ net dollar selling price






42. 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






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






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






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






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






47. 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






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






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






50. Can be transformed simply and rapidly into cash