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






2. Short time - like 1 or 2 day sales






3. Cost + Markup






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






5. 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






6. Financial debts incurred by a retailer






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






8. 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.






9. Net Profit/ Net Sales






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






11. 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






12. Price is changed (up or down)






13. Current Liabilites/ Net Worth






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






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






16. Evaluates the managament of capital






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






18. What the retailer owns in monetary value






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






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






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






22. 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






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






24. (Cash + Accounts Receivable) / Current Liabilities






25. Costs involved in running the business






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






27. 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.






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






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






30. 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






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






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






33. 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






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






35. 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






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






37. 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






38. Can be transformed simply and rapidly into cash






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






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






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






42. 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.






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






44. 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






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






46. 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.






47. Revenues received by a retailer






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






49. Price Lining - price zones - price ranges






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