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. (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%






2. Financial debts incurred by a retailer






3. The weather - merchandise is shopworn - economic downturn






4. 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






5. Sales for the period/ average inventory






6. 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






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






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






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






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






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






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






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






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






16. Costs involved in running the business






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






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






19. 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.






20. 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.






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






22. 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.






23. Net Profit After Taxes/ Total Assets






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






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






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






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. 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






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. Current Assets/ Current Liabilities






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






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






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






35. Current Liabilites/ Net Worth






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






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






38. Liabilities+ Owner's equity or net worth






39. Buying errors - promotion errors - pricing errors - uncontrollable errors






40. (Cash + Accounts Receivable) / Current Liabilities






41. 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






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






43. Price Lining - price zones - price ranges






44. What the retailer owns in monetary value






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






46. Net Profit After Taxes/ Net Worth






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






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






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






50. Sales less cost of goods sold