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. Can be transformed simply and rapidly into cash






2. 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






3. Net dollar markdown/ net dollar selling price






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






5. Total Assets/ Net Worth






6. 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






7. Net Profit After Taxes/ Net Worth






8. 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.






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






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






11. Total Expenses/ Net Sales






12. 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






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






14. 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.






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






16. Current Liabilites/ Net Worth






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






18. One that is just enough to move the goods






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






21. Costs involved in running the business






22. 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






23. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.






24. 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.






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






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






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






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






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






30. 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






31. 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






32. 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






33. Evaluates the managament of capital






34. Current Assets/ Current Liabilities






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






36. Liabilities+ Owner's equity or net worth






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






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






39. Sales for the period/ average inventory






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






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






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






43. Price Lining - price zones - price ranges






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. Revenues received by a retailer






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






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






48. 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.






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






50. What the retailer owns in monetary value