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/ Net Sales






2. 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






3. Short time - like 1 or 2 day sales






4. 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.






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






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






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






8. 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






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






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






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






12. (Cash + Accounts Receivable) / Current Liabilities






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






14. Total Expenses/ Net Sales






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






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






17. 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






18. Price Lining - price zones - price ranges






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






20. Sales less cost of goods sold






21. 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.






22. 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






23. 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






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






25. 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.






26. Cost + Markup






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






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






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






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






31. Total Assets/ Net Worth






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






33. Current Assets/ Current Liabilities






34. (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%






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






36. 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






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






38. Net Profit After Taxes/ Net Worth






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






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






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






42. One that is just enough to move the goods






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






44. What the retailer owns in monetary value






45. 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






46. Revenues received by a retailer






47. 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






48. Liabilities+ Owner's equity or net worth






49. Current Liabilites/ Net Worth






50. Net Profit After Taxes/ Total Assets