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. Net Profit After Taxes/ Net Worth






2. Liabilities+ Owner's equity or net worth






3. 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






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






5. 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






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






7. Net Profit After Taxes/ Total Assets






8. 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.






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






10. 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.






11. 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






12. 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.






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






14. Cost + Markup






15. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






17. Can be transformed simply and rapidly into cash






18. Short time - like 1 or 2 day sales






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






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






21. 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.






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






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






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






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






26. 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.






27. Sales less cost of goods sold






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






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






30. 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.






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






32. Current Assets/ Current Liabilities






33. 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






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






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






36. 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






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






38. One that is just enough to move the goods






39. 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






40. 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






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






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






43. Costs involved in running the business






44. 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






45. Current Liabilites/ Net Worth






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






47. Evaluates the managament of capital






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






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






50. The weather - merchandise is shopworn - economic downturn