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 weather - merchandise is shopworn - economic downturn






2. One that is just enough to move the goods






3. Sales for the period/ average inventory






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






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






6. 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.






7. Short time - like 1 or 2 day sales






8. Revenues received by a retailer






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






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






11. Sales less cost of goods sold






12. 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






13. The prices from lowest to highest that are carried within a merchandise category






14. Ranges of prices that appeals for a particular group of consumers






15. Evaluates the managament of capital






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






17. 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






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






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






20. Current Liabilites/ Net Worth






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






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






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






24. 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






25. 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






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






27. Can be transformed simply and rapidly into cash






28. 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.






29. Net dollar markdown/ net dollar selling price






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






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






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






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






34. 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






35. Net Profit After Taxes/ Total Assets






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






37. 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.






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






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






40. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






42. Price is changed (up or down)






43. Net Profit After Taxes/ Net Worth






44. Total Expenses/ Net Sales






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






46. Examines the financial health of a retailer - as one of the best indicators of having too much debt in relationship to net worth. Comparres the money that vendors or banks are risking with the money that the retail owners have invested in their opera






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






48. 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






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






50. 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