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






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






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






4. 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.






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






6. 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.






7. Net Profit After Taxes/ Total Assets






8. Revenues received by a retailer






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






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






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






12. Costs involved in running the business






13. 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.






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






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






16. Original Retail price- markdown selling price






17. (planned expenses + planned operating profit + planned stock shortages + markdowns + employee and customer discounts) / (planned net sales + stock shortages + markdowns + employee and customer discounts) x 100%






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






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






20. 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.






21. Net Profit/ Net Sales






22. Price is changed (up or down)






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






24. Liabilities+ Owner's equity or net worth






25. Evaluates the managament of capital






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






27. 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






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






29. What the retailer owns in monetary value






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






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






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






33. 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






34. 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






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






36. Total Assets/ Net Worth






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






38. The weather - merchandise is shopworn - economic downturn






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






40. 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






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






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






43. Net dollar markdown/ net dollar selling price






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






45. 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






46. Can be transformed simply and rapidly into cash






47. (Cash + Accounts Receivable) / Current Liabilities






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






49. One that is just enough to move the goods






50. 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