67) The strategic profit model is useful to retailers because it
A) is derived from the income statement.
B) uses owner’s equity as its primary criterion.
C) uses inventory turnover as its primary criterion.
D) is derived from the balance sheet from the last day of the year.
E) combines profit margin management and asset management.
68) Grocery stores charging their vendors for space in their stores is referred to as a
A) Charge back
B) Shelf space allocation
C) Vertical variance
D) Save space
E) Slotting allowance
69) ________ is a method entrepreneurs use to raise money from various individuals to support a
particular project.
A) Chargebacks
B) Crowdfunding
C) Vouchsafing
D) Stocking fee
E) Oddity allowance
70) If a retailer’s gross margin percent is on plan, however the retailer is tracking below plan for net
operating profit margin plan, which of these options would help improve their situation?
A) increase cost of goods
B) increase markdowns
C) increase payroll
D) decrease selling, general and administrative expenses
E) borrowing money from a lender
71) If a retailer’s gross margin is tracking below plan, which of these options would increase their
gross margin?
A) Negotiate better prices with vendors to decrease cost of goods sold
B) Increase payroll
C) Increase markdowns
D) Decrease utilities
E) Defer paying taxes
72) Michael’s sets goals at the top of the organization. Then, it breaks down these objectives for
merchandise categories and regions. When these objectives reach the buyers, each objective is
personalized. What does this process demonstrate?
A) Accountable design planning
B) Decentralized planning
C) Functional development
D) Indirect planning
E) Top-down planning
73) The executives for New Haus set the retail objective for the company. These objectives are
broken down in order to create the objectives for each merchandise category, as well as for each
region of the country. Further breakdowns of the objectives occur when the executives’ objectives
reach the buyers who must personalize those objectives. This is an example of ________ planning.
A) accountable design
B) decentralized
C) functional development
D) indirect
E) top-down
74) If the executives for OfficeMax developed the chain’s objectives by asking buyers and store
managers to forecast sales and merchandise for the next year, and then transmitted those estimates
up the organization to the top level, it would be an example of ________ planning.
A) accountable
B) bottom-up
C) conventional
D) direct
E) functional
75) Which of the following would be the best example of an input measure?
A) Inventory
B) Gross margin
C) Net profits
D) Return on assets
E) Sales revenue
76) Which of the following assesses the results of a retailer’s investments?
A) Balance sheets
B) Input measures
C) Owners’ equity
D) Output measures
E) Revenue assessments
77) Which of the following would be the best example of an output measure?
A) The square feet of shelf space allocated to a particular item
B) The expense of utilities
C) The purchase of new inventory
D) The number of employees it takes to run a store
E) Net profits for the store for the year
78) Which of the following is used to assess overall performance at a corporate level?
A) Asset
B) Square foot of selling space
C) The number of full-time employees
D) Comparable-store sales growth
E) Inventory
79) Which of the following would be the best example of an output measure?
A) Square feet of shelf space allocated to a particular item
B) The expense of running a magazine advertisement
C) The purchase of new inventory
D) The cost of paying overtime to a clerk who worked late
E) Monthly net profits for the entire store
80) Which of the following is an example of a productivity measure?
A) Cost of merchandise
B) Inventory turnover
C) Gross margin
D) Net sales
E) Advertising expenses
81) Identify and describe the three types of objectives retailers might have in the strategic planning
process.
82)
Retailer A
Retailer B
Net Sales
$200,000
$340,000
Total Sales
$355,000
$580,000
Using the information above, calculate each retailer’s asset turnover and compare the results.
Discuss what the results indicate about each retailer.
Net Sales/Total Assets = Asset Turnover
83) Identify and describe the two paths of activities that determine return on assets (ROA).
84) Identify and describe the measures retailers use to assess their financial performance.
85)
Retailer A
Retailer B
Net Sales
$200,00
$340,000
COGS
$83,000
$180,000
Operating Expenses
$50,000
$93,000
Using the information above, calculate each retailer’s gross margin percent and net operating profit
percent. Compare the two and discuss which retailer is performing better. What could the poorer
performing retailer do to increase their financial performance?
Retailer A
Retailer B
Net Sales
$200,000
$340,000
$83,000
$180,000
Gross Margin $
$117,000
$160,000
Gross Margin %
58.5%
47.1%
Operating Expenses
$50,000
$93,000
Operating Exp%
25%
27.4%
NOP $
$67,000
$67,000
NOP %
33.5%
19.7%
86) What is same-store sales growth and how retailers use it?
87) What are the critical assets controlled by a store manager?