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. Short time - like 1 or 2 day sales






2. Current Assets/ Current Liabilities






3. 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






4. 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






5. 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






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






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






8. Sales less cost of goods sold






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






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






12. Sales for the period/ average inventory






13. 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






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






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






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






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






18. Net Profit After Taxes/ Total Assets






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






20. 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






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






22. 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.






23. 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.






24. Original Retail price- markdown selling price






25. 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






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






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






28. Net Profit/ Net Sales






29. (Cash + Accounts Receivable) / Current Liabilities






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






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






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






33. Can be transformed simply and rapidly into cash






34. 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






35. Current Liabilites/ Net Worth






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






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






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






39. Costs involved in running the business






40. Price Lining - price zones - price ranges






41. 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.






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






43. What the retailer owns in monetary value






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






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






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






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






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






49. 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.






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