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. Costs involved in running the business






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






3. 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






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






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






6. Can be transformed simply and rapidly into cash






7. Sales for the period/ average inventory






8. Price Lining - price zones - price ranges






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






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






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






12. Net dollar markdown/ net dollar selling price






13. Net Profit After Taxes/ Net Worth






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






15. 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






16. 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.






17. (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%






18. 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.






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






20. 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.






21. Short time - like 1 or 2 day sales






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






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






24. Cost + Markup






25. Current Liabilites/ Net Worth






26. Original Retail price- markdown selling price






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






28. 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.






29. Net Profit After Taxes/ Total Assets






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






31. 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






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






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






34. Net Profit/ Net Sales






35. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.






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






37. 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.






38. 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






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






40. The weather - merchandise is shopworn - economic downturn






41. 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






42. (Cash + Accounts Receivable) / Current Liabilities






43. 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






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






45. Total Expenses/ Net Sales






46. 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






47. Financial debts incurred by a retailer






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






49. 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






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