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






2. 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.






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






4. Can be transformed simply and rapidly into cash






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






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






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






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






9. Current Liabilites/ Net Worth






10. Total Expenses/ Net Sales






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






12. Net Profit After Taxes/ Total Assets






13. 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






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






15. Net Profit/ Net Sales






16. Revenues received by a retailer






17. Sales less cost of goods sold






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






19. 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






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






21. Cost + Markup






22. 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






23. Liabilities+ Owner's equity or net worth






24. Total Assets/ Net Worth






25. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down






26. 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.






27. Current Assets/ Current Liabilities






28. 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.






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






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






31. Net Profit After Taxes/ Net Worth






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






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






34. The weather - merchandise is shopworn - economic downturn






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






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






37. Price Lining - price zones - price ranges






38. Financial debts incurred by a retailer






39. 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






40. Evaluates the managament of capital






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






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






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






44. 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






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






46. Original Retail price- markdown selling price






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






48. Net dollar markdown/ net dollar selling price






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






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