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. What the retailer owns in monetary value






2. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






4. Net Profit After Taxes/ Total Assets






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






6. Can be transformed simply and rapidly into cash






7. Financial debts incurred by a retailer






8. 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






9. Net dollar markdown/ net dollar selling price






10. Current Liabilites/ Net Worth






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






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






13. Sales for the period/ average inventory






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






15. 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.






16. 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






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






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






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






21. Net Profit After Taxes/ Net Worth






22. 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






23. Total Assets/ Net Worth






24. Price Lining - price zones - price ranges






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






26. Evaluates the managament of capital






27. One that is just enough to move the goods






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






29. Original Retail price- markdown selling price






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






31. 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






32. 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.






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






34. 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.






35. Short time - like 1 or 2 day sales






36. 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






37. Total Expenses/ Net Sales






38. Current Assets/ Current Liabilities






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






40. Cost + Markup






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






42. 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.






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






44. 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






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






46. (Cash + Accounts Receivable) / Current Liabilities






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






48. 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






49. Liabilities+ Owner's equity or net worth






50. 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