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. The energizing force that fuels and sustains our economic system






3. Short time - like 1 or 2 day sales






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






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






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






7. Evaluates the managament of capital






8. 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.






9. 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






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






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






12. Total Expenses/ Net Sales






13. Net dollar markdown/ net dollar selling price






14. One that is just enough to move the goods






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






16. 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






17. 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






18. 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.






19. 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.






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






21. Buying errors - promotion errors - pricing errors - uncontrollable errors






22. Can be transformed simply and rapidly into cash






23. Price is changed (up or down)






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






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






26. 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






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






29. Net Profit/ Net Sales






30. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)






31. Sales less cost of goods sold






32. Original Retail price- markdown selling price






33. 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.






34. 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






35. Costs involved in running the business






36. Cost + Markup






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






38. 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






39. 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






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






41. Price Lining - price zones - price ranges






42. Total Assets/ Net Worth






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






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






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






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






47. 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.






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






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






50. 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.