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. Cost + Markup






2. Cash Received by the retailer-cash leaving the retailer






3. Price is changed (up or down)






4. Buying errors - promotion errors - pricing errors - uncontrollable errors






5. Liabilities+ Owner's equity or net worth






6. Evaluates the managament of capital






7. 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






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






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. 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






11. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes






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






13. Sales less cost of goods sold






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






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






16. 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






17. What the retailer owns in monetary value






18. 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






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. 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






21. Total Assets/ Net Worth






22. 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.






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






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






25. Net Profit After Taxes/ Total Assets






26. Price Lining - price zones - price ranges






27. 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






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






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






30. 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






31. 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






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






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






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






35. Net Profit After Taxes/ Net Worth






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






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






38. (Cash + Accounts Receivable) / Current Liabilities






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






40. 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.






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






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






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






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






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






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






48. Net dollar markdown/ net dollar selling price






49. Net Profit/ Net Sales






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