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






2. 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.






3. 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






4. 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






5. Current Liabilites/ Net Worth






6. Total Expenses/ Net Sales






7. 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






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






9. 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






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






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






12. Net Profit After Taxes/ Net Worth






13. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down






14. 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






15. Revenues received by a retailer






16. 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.






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






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






19. 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






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






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






22. Short time - like 1 or 2 day sales






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






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






25. Net Profit After Taxes/ Total Assets






26. 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.






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






28. Price is changed (up or down)






29. Price Lining - price zones - price ranges






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






31. Original Retail price- markdown selling price






32. Net Profit/ Net Sales






33. 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.






34. 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.






35. What the retailer owns in monetary value






36. Sales for the period/ average inventory






37. One that is just enough to move the goods






38. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






40. Evaluates the managament of capital






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






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






43. Costs involved in running the business






44. Net dollar markdown/ net dollar selling price






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






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






47. 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






48. 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






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






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