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. The energizing force that fuels and sustains our economic system






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






4. 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






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






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






7. 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






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






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






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






11. 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






12. 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.






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






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






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






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






17. Net dollar markdown/ net dollar selling price






18. Buying errors - promotion errors - pricing errors - uncontrollable errors






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. 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.






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






22. Revenues received by a retailer






23. One that is just enough to move the goods






24. Net Profit/ Net Sales






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






26. Net Profit After Taxes/ Net Worth






27. (Cash + Accounts Receivable) / Current Liabilities






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






29. What the retailer owns in monetary value






30. 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.






31. Total Expenses/ Net Sales






32. Original Retail price- markdown selling price






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






34. 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






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






36. Financial debts incurred by a retailer






37. 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






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






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






40. Can be transformed simply and rapidly into cash






41. Price is changed (up or down)






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






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






44. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item






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






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






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






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






49. Cost + Markup






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