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. 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






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






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






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






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






6. (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%






7. 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






8. 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






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






10. Revenues received by a retailer






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






12. 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






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






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






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






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






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






18. Total Expenses/ Net Sales






19. 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.






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






21. Net Profit After Taxes/ Net Worth






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






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






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






25. 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






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






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






28. Net dollar markdown/ net dollar selling price






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






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






31. Financial debts incurred by a retailer






32. 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.






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






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






35. Costs involved in running the business






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






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






38. Liabilities+ Owner's equity or net worth






39. 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






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






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






42. 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






43. Current Assets/ Current Liabilities






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






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






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






47. Current Liabilites/ Net Worth






48. 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.






49. Price Lining - price zones - price ranges






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