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






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






4. One that is just enough to move the goods






5. (Cash + Accounts Receivable) / Current Liabilities






6. 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






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






8. 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.






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






10. Buying errors - promotion errors - pricing errors - uncontrollable errors






11. The weather - merchandise is shopworn - economic downturn






12. 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






13. Current Liabilites/ Net Worth






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






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






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






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






18. 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






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






20. 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






21. Price Lining - price zones - price ranges






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






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






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






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






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






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






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






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






30. Net dollar markdown/ net dollar selling price






31. Revenues received by a retailer






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






33. 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.






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






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






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






37. Price is changed (up or down)






38. 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.






39. 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.






40. Liabilities+ Owner's equity or net worth






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






42. Total Expenses/ Net Sales






43. Net Profit After Taxes/ Net Worth






44. Costs involved in running the business






45. Sales for the period/ average inventory






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






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






48. What the retailer owns in monetary value






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






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