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






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






3. (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%






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






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






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






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






8. Short time - like 1 or 2 day sales






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






10. 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.






11. 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.






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






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






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






15. Total Assets/ Net Worth






16. Price is changed (up or down)






17. 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.






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






19. 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






20. Current Assets/ Current Liabilities






21. 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






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






23. Sales for the period/ average inventory






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






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






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






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






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






29. What the retailer owns in monetary value






30. Liabilities+ Owner's equity or net worth






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






32. Price Lining - price zones - price ranges






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






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






35. Net Profit/ Net Sales






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






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






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






39. Original Retail price- markdown selling price






40. Sales less cost of goods sold






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






42. Net Profit After Taxes/ Total Assets






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






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






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






46. Total Expenses/ Net Sales






47. 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






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






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






50. 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