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. Price is changed (up or down)






2. 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.






3. 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.






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






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






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






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






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






9. (Cash + Accounts Receivable) / Current Liabilities






10. Short time - like 1 or 2 day sales






11. 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






12. Net Profit/ Net Sales






13. Net dollar markdown/ net dollar selling price






14. (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%






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






16. 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






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






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






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






20. Cost + Markup






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






22. 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






23. 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.






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






25. Evaluates the managament of capital






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






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






28. Inventory Valuation Method where the cost to the retailer of each item purchased from a vendor is entered in the accounting system and/or placed on the merchandise item or on it's package. At times - freight charges are built into the cost. Coding of






29. Financial debts incurred by a retailer






30. 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






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






32. One that is just enough to move the goods






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






34. Can be transformed simply and rapidly into cash






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






36. Sales less cost of goods sold






37. 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






38. Current Assets/ Current Liabilities






39. Current Liabilites/ Net Worth






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






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






43. Net Profit After Taxes/ Net Worth






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






45. 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






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






47. Sales for the period/ average inventory






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






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






50. 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