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. One that is just enough to move the goods






2. 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






3. The weather - merchandise is shopworn - economic downturn






4. 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.






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






6. 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






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






8. Buying errors - promotion errors - pricing errors - uncontrollable errors






9. Total Assets/ Net Worth






10. 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






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






12. Price is changed (up or down)






13. (Cash + Accounts Receivable) / Current Liabilities






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






15. What the retailer owns in monetary value






16. Cost + Markup






17. Financial debts incurred by a retailer






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






19. Costs involved in running the business






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






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






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






23. Price Lining - price zones - price ranges






24. Liabilities+ Owner's equity or net worth






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






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






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






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






29. 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






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






31. Current Liabilites/ Net Worth






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






33. 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.






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






35. 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






36. 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.






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






38. Net Profit After Taxes/ Net Worth






39. 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






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






41. 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






42. Can be transformed simply and rapidly into cash






43. 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






44. Net Profit After Taxes/ Total Assets






45. Evaluates the managament of capital






46. Net dollar markdown/ net dollar selling price






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






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






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






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