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. Cost + Markup






2. 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






3. Evaluates the managament of capital






4. 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






5. 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.






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






7. (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%






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






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






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






11. 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.






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






13. Promotional markdown that involves selling at or near cost for promotional purposes






14. 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.






15. 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






16. The weather - merchandise is shopworn - economic downturn






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






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






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






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






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






22. Short time - like 1 or 2 day sales






23. Price Lining - price zones - price ranges






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






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






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






27. Sales less cost of goods sold






28. Price is changed (up or down)






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






30. Net Profit After Taxes/ Total Assets






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






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






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






34. Current Assets/ Current Liabilities






35. (Cash + Accounts Receivable) / Current Liabilities






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






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






38. 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.






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






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






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






42. 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.






43. Liabilities+ Owner's equity or net worth






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






45. 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






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






47. Original Retail price- markdown selling price






48. 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.






49. Net dollar markdown/ net dollar selling price






50. 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