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. One that is just enough to move the goods






2. Net Profit After Taxes/ Total Assets






3. 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






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






5. Net Profit After Taxes/ Net Worth






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






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






8. 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.






9. 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






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






11. 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






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






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






14. 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






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






16. 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






17. Costs involved in running the business






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






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






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






21. What the retailer owns in monetary value






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






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






24. 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.






25. 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






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






27. 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.






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






29. Revenues received by a retailer






30. (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%






31. 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






32. Total Expenses/ Net Sales






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






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






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






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






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






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






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






40. Net dollar markdown/ net dollar selling price






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






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






43. Liabilities+ Owner's equity or net worth






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






45. 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.






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






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






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






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






50. Can be transformed simply and rapidly into cash