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






2. Liabilities+ Owner's equity or net worth






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






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






5. What the retailer owns in monetary value






6. Price Lining - price zones - price ranges






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






8. 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






9. One that is just enough to move the goods






10. Buying errors - promotion errors - pricing errors - uncontrollable errors






11. (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%






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






13. Sales less cost of goods sold






14. Current Assets/ Current Liabilities






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






16. Revenues received by a retailer






17. 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






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






19. 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






20. Current Liabilites/ Net Worth






21. 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






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






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






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






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






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






27. Cost + Markup






28. 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.






29. The weather - merchandise is shopworn - economic downturn






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






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






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






33. 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.






34. 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






35. Total Assets/ Net Worth






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






38. 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.






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






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






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






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






43. Net Profit After Taxes/ Total Assets






44. Net Profit After Taxes/ Net Worth






45. 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






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






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






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






49. (Cash + Accounts Receivable) / Current Liabilities






50. Price is changed (up or down)