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. 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.






2. Current Liabilites/ Net Worth






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






4. Can be transformed simply and rapidly into cash






5. Sales less cost of goods sold






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






7. 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






8. 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.






9. Financial debts incurred by a retailer






10. Liabilities+ Owner's equity or net worth






11. (Cash + Accounts Receivable) / Current Liabilities






12. Net Profit After Taxes/ Net Worth






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






14. 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.






15. Evaluates the managament of capital






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






17. Net Profit After Taxes/ Total Assets






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






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






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






22. 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.






23. 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






24. Net Profit/ Net Sales






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






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






27. 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






28. Buying errors - promotion errors - pricing errors - uncontrollable errors






29. 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






30. Sales for the period/ average inventory






31. 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.






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






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






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






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






36. 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






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






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






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






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






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






43. Costs involved in running the business






44. Revenues received by a retailer






45. Short time - like 1 or 2 day sales






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






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






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






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






50. What the retailer owns in monetary value