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. Current Liabilites/ Net Worth






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






3. 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






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






5. Net Profit/ Net Sales






6. Net dollar markdown/ net dollar selling price






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






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






9. Price Lining - price zones - price ranges






10. What the retailer owns in monetary value






11. Net Profit After Taxes/ Net Worth






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






13. Current Assets/ Current Liabilities






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






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






17. 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.






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






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






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






21. 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






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






23. Cost + Markup






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






25. Total Assets/ Net Worth






26. Can be transformed simply and rapidly into cash






27. The weather - merchandise is shopworn - economic downturn






28. One that is just enough to move the goods






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






30. (Cash + Accounts Receivable) / Current Liabilities






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






32. 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






33. Short time - like 1 or 2 day sales






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






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






36. 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.






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






38. Liabilities+ Owner's equity or net worth






39. Evaluates the managament of capital






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






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






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






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






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






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






47. Basic premise is to increase profits through more sales without an increase in inventory. Inventory is expressed in cost terms rather than cost percent - because it is related to investment dollars in gross margin - it should be expressed in cost num






48. (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%






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






50. Total Expenses/ Net Sales