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. The energizing force that fuels and sustains our economic system






2. 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






3. One that is just enough to move the goods






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






5. (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%






6. 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






7. 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.






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






9. 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






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






11. Revenues received by a retailer






12. (Cash + Accounts Receivable) / Current Liabilities






13. Price is changed (up or down)






14. Evaluates the managament of capital






15. Can be transformed simply and rapidly into cash






16. Sales less cost of goods sold






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






18. 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.






19. Price Lining - price zones - price ranges






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






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






22. Net dollar markdown/ net dollar selling price






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






24. Net Profit After Taxes/ Total Assets






25. What the retailer owns in monetary value






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






27. 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.






28. 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.






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






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






31. 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






32. Financial debts incurred by a retailer






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






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






35. Current Liabilites/ Net Worth






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






37. Net Profit/ Net Sales






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






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






40. Cost + Markup






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






42. 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






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






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






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






46. Total Expenses/ Net Sales






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






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






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






50. Sales for the period/ average inventory