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






2. 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.






3. 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






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






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






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






7. Cost + Markup






8. Current Assets/ Current Liabilities






9. 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.






10. 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






11. 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






12. 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






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






14. What the retailer owns in monetary value






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






16. Net Profit After Taxes/ Total Assets






17. 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.






18. Revenues received by a retailer






19. Short time - like 1 or 2 day sales






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






21. Price is changed (up or down)






22. 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






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






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






25. Sales less cost of goods sold






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






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






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






29. 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






30. Current Liabilites/ Net Worth






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






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






33. (Cash + Accounts Receivable) / Current Liabilities






34. Can be transformed simply and rapidly into cash






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






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






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






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






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






40. Original Retail price- markdown selling price






41. Costs involved in running the business






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






43. 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






44. Evaluates the managament of capital






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






46. 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.






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






48. The weather - merchandise is shopworn - economic downturn






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






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






Can you answer 50 questions in 15 minutes?



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