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. Liabilities+ Owner's equity or net worth






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






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






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






5. 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.






6. 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






7. Net Profit/ Net Sales






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






9. Total Assets/ Net Worth






10. 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






11. 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.






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






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






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






15. Total Expenses/ Net Sales






16. Can be transformed simply and rapidly into cash






17. What the retailer owns in monetary value






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






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






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






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






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






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






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






25. Net Profit After Taxes/ Net Worth






26. Costs involved in running the business






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






28. Current Assets/ Current Liabilities






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






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. (Cash + Accounts Receivable) / Current Liabilities






32. Financial debts incurred by a retailer






33. 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






34. 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






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






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






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






38. Short time - like 1 or 2 day sales






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






40. Revenues received by a retailer






41. Cost + Markup






42. Sales for the period/ average inventory






43. 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.






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






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






46. 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






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






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






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






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