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






2. 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.






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






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






5. 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






6. Evaluates the managament of capital






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






8. 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






9. The weather - merchandise is shopworn - economic downturn






10. (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%






11. Net Profit/ Net Sales






12. 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






13. Revenues received by a retailer






14. 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






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






16. Current Assets/ Current Liabilities






17. 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.






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






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






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






21. Financial debts incurred by a retailer






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






23. Costs involved in running the business






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






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






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






27. Sales less cost of goods sold






28. One that is just enough to move the goods






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






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






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






32. Buying errors - promotion errors - pricing errors - uncontrollable errors






33. Net Profit After Taxes/ Total Assets






34. Total Expenses/ Net Sales






35. 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






36. Price is changed (up or down)






37. 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.






38. Net dollar markdown/ net dollar selling price






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






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






42. 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






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






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






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






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. Improper displays - merchandise returns due to high pressure selling






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






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






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