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 energizing force that fuels and sustains our economic system






2. 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






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






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






5. Total Assets/ Net Worth






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






7. Total Expenses/ Net Sales






8. Sales less cost of goods sold






9. Price Lining - price zones - price ranges






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






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






12. 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






13. 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.






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






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






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






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






18. Current Liabilites/ Net Worth






19. 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






20. Can be transformed simply and rapidly into cash






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






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






23. One that is just enough to move the goods






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. 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






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






27. Current Assets/ Current Liabilities






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






29. Costs involved in running the business






30. 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






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






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






33. 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.






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






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






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






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






38. 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






39. 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






40. 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.






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






42. 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






43. What the retailer owns in monetary value






44. (Cash + Accounts Receivable) / Current Liabilities






45. Liabilities+ Owner's equity or net worth






46. Revenues received by a retailer






47. Cost + Markup






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






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






50. Original Retail price- markdown selling price