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. 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






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






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






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






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






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






7. What the retailer owns in monetary value






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






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. Total Expenses/ Net Sales






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






12. One that is just enough to move the goods






13. 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






14. Net Profit After Taxes/ Net Worth






15. 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.






16. 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






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






18. 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






19. 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






20. Current Assets/ Current Liabilities






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






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






23. Total Assets/ Net Worth






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






25. Cost + Markup






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






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






28. 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






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






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






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






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






33. 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






34. Sales for the period/ average inventory






35. Can be transformed simply and rapidly into cash






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






37. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






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






41. (Cash + Accounts Receivable) / Current Liabilities






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






43. 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






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






45. (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%






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






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






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






49. Current Liabilites/ Net Worth






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