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. (Cash + Accounts Receivable) / Current Liabilities






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






3. Current Liabilites/ Net Worth






4. What the retailer owns in monetary value






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






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






7. Sales less cost of goods sold






8. Total Assets/ Net Worth






9. 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






10. Evaluates the managament of capital






11. 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.






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






13. 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.






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






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






16. Net dollar markdown/ net dollar selling price






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






18. 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






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






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






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






22. 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






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






24. 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






25. The weather - merchandise is shopworn - economic downturn






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






27. Financial debts incurred by a retailer






28. Total Expenses/ Net Sales






29. 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.






30. Short time - like 1 or 2 day sales






31. Net Profit/ Net Sales






32. Price Lining - price zones - price ranges






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






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






35. Current Assets/ Current Liabilities






36. Buying errors - promotion errors - pricing errors - uncontrollable errors






37. 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






38. 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






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






40. Costs involved in running the business






41. 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






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






43. Net Profit After Taxes/ Total Assets






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






45. One that is just enough to move the goods






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






47. 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






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






49. Net Profit After Taxes/ Net Worth






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