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. Can be transformed simply and rapidly into cash






2. Total Assets/ Net Worth






3. 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






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






5. Liabilities+ Owner's equity or net worth






6. 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.






7. (Cash + Accounts Receivable) / Current Liabilities






8. 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.






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






10. 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






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






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






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






14. The weather - merchandise is shopworn - economic downturn






15. 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.






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






17. 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.






18. Cost + Markup






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






20. 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.






21. 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.






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






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






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






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






26. 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






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






28. Short time - like 1 or 2 day sales






29. Sales for the period/ average inventory






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






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






32. Revenues received by a retailer






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






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






35. 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






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






37. Price Lining - price zones - price ranges






38. 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






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






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






41. Current Liabilites/ Net Worth






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






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






44. 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.






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






46. Buying errors - promotion errors - pricing errors - uncontrollable errors






47. Financial debts incurred by a retailer






48. One that is just enough to move the goods






49. Net dollar markdown/ net dollar selling price






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