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






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






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






4. Total Assets/ Net Worth






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






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






7. Short time - like 1 or 2 day sales






8. 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






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






10. Evaluates the managament of capital






11. 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.






12. Usually lower than original - but held for longer period






13. 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






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






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. What the retailer owns in monetary value






17. 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






18. Costs involved in running the business






19. Original Retail price- markdown selling price






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






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






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. 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






24. Liabilities+ Owner's equity or net worth






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






26. (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%






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






28. Buying errors - promotion errors - pricing errors - uncontrollable errors






29. 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.






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






31. 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.






32. Net Profit/ Net Sales






33. Net Profit After Taxes/ Total Assets






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






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






36. Sales less cost of goods sold






37. 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






38. Net Profit After Taxes/ Net Worth






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






40. Net dollar markdown/ net dollar selling price






41. The weather - merchandise is shopworn - economic downturn






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






43. 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.






44. Financial debts incurred by a retailer






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






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






47. One that is just enough to move the goods






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






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






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