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. 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.






2. 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






3. Current Liabilites/ Net Worth






4. 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






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






6. Price Lining - price zones - price ranges






7. 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






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






9. 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.






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






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






12. Short time - like 1 or 2 day sales






13. Net Profit/ Net Sales






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






15. 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






16. (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%






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






18. The weather - merchandise is shopworn - economic downturn






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. 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






21. Revenues received by a retailer






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






23. 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






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






25. Net Profit After Taxes/ Net Worth






26. Can be transformed simply and rapidly into cash






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






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






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






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






31. 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






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






33. Sales less cost of goods sold






34. Evaluates the managament of capital






35. 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






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






37. Costs involved in running the business






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






39. One that is just enough to move the goods






40. Liabilities+ Owner's equity or net worth






41. Current Assets/ Current Liabilities






42. 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






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






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






45. Cost + Markup






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






47. 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






48. Net dollar markdown/ net dollar selling price






49. Net Profit After Taxes/ Total Assets






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