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. 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






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






3. 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.






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






5. Price is changed (up or down)






6. Buying errors - promotion errors - pricing errors - uncontrollable errors






7. Total Expenses/ Net Sales






8. Net Profit/ Net Sales






9. 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






10. Net Profit After Taxes/ Total Assets






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






12. 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






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






14. Costs involved in running the business






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






16. Sales for the period/ average inventory






17. 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






18. Can be transformed simply and rapidly into cash






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






20. (Cash + Accounts Receivable) / Current Liabilities






21. Net dollar markdown/ net dollar selling price






22. Sales less cost of goods sold






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






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






25. Evaluates the managament of capital






26. Liabilities+ Owner's equity or net worth






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. 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.






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






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






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






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






33. 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






34. 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






35. Current Liabilites/ Net Worth






36. Net Profit After Taxes/ Net Worth






37. 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






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






39. Total Assets/ Net Worth






40. Revenues received by a retailer






41. Short time - like 1 or 2 day sales






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






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. 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.






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






46. One that is just enough to move the goods






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






48. Financial debts incurred by a retailer






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






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