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. 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.






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






3. Total Assets/ Net Worth






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






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






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. Price is changed (up or down)






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






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






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






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






12. One that is just enough to move the goods






13. 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






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






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






16. 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.






17. Sales less cost of goods sold






18. 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






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






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






21. 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






22. (Cash + Accounts Receivable) / Current Liabilities






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






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






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






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






27. Costs involved in running the business






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






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






30. 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






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






32. Cost + Markup






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






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






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






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






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






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






39. Can be transformed simply and rapidly into cash






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






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






42. Financial debts incurred by a retailer






43. 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.






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






45. Net Profit After Taxes/ Total Assets






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






47. 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






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






49. Current Assets/ Current Liabilities






50. Current Liabilites/ Net Worth