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. 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






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






4. Liabilities+ Owner's equity or net worth






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






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






7. Cost + Markup






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






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






10. Financial debts incurred by a retailer






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






12. Revenues received by a retailer






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






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






15. 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






16. 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






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






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






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






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






21. Net dollar markdown/ net dollar selling price






22. Price is changed (up or down)






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






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






25. 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.






26. 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.






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






28. Sales for the period/ average inventory






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






30. 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






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






32. Net Profit After Taxes/ Total Assets






33. Can be transformed simply and rapidly into cash






34. 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.






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






36. Total Assets/ Net Worth






37. 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






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






39. Evaluates the managament of capital






40. 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.






41. Price Lining - price zones - price ranges






42. 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






43. (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%






44. One that is just enough to move the goods






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






46. 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






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






48. (Cash + Accounts Receivable) / Current Liabilities






49. First price or Manufacturers suggestet Retal Price (MSRP)






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