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. The number of items remaining in stock x dollar markdown






2. Liabilities+ Owner's equity or net worth






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






4. Net Profit/ Net Sales






5. 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.






6. Current Assets/ Current Liabilities






7. 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.






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






9. 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.






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






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






12. 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.






13. 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.






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






15. Price Lining - price zones - price ranges






16. Sales for the period/ average inventory






17. 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






18. Financial debts incurred by a retailer






19. (Cash + Accounts Receivable) / Current Liabilities






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






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






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






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






24. Net Profit After Taxes/ Total Assets






25. Evaluates the managament of capital






26. 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.






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






28. Net dollar markdown/ net dollar selling price






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






30. Cost + Markup






31. Revenues received by a retailer






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






33. Sales less cost of goods sold






34. Net Profit After Taxes/ Net Worth






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






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






37. Buying errors - promotion errors - pricing errors - uncontrollable errors






38. Total Assets/ Net Worth






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






40. 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






41. What the retailer owns in monetary value






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






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






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






46. 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






47. (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%






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






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






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