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. 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.






2. Original Retail price- markdown selling price






3. Total Expenses/ Net Sales






4. (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%






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






6. What the retailer owns in monetary value






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






8. Net Profit After Taxes/ Net Worth






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






10. Price Lining - price zones - price ranges






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






12. Cost + Markup






13. Current Liabilites/ Net Worth






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






15. Wrong Merchandise - odd assortment colors/sizes - seasonal goods






16. 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.






17. 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.






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






20. Net Profit After Taxes/ Total Assets






21. 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






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






23. Price is changed (up or down)






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






25. The weather - merchandise is shopworn - economic downturn






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






27. 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






28. Can be transformed simply and rapidly into cash






29. Net Profit/ Net Sales






30. Sales for the period/ average inventory






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






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






33. Liabilities+ Owner's equity or net worth






34. Sales less cost of goods sold






35. Short time - like 1 or 2 day sales






36. The awareness of the consumer to what they perceive to be the window of cost within which they will buy a particular product or service






37. 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.






38. 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






39. 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






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






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






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






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






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






45. Financial debts incurred by a retailer






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






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






48. Total Assets/ Net Worth






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






50. Buying errors - promotion errors - pricing errors - uncontrollable errors