MKTG 350 - chapter 6
The hosting of a website for the purpose of online retailing would be classified as a(n)
operating expense
The formula for calculating operating expenses percentage is
operating expenses/net sales
The strategic profit model decomposes ROA into two components
operating profit margin percentage and asset turnover
Grocery stores charging their vendors for space in their stores is referred to as a
slotting allowance
When Nick is figuring the current assets for his nail salon, he should be certain to include ________ in his calculations.
the cash in the drawer
which of the following would be a fixed asset?
the store building
What does asset turnover measure?
this metric helps investors understand how effectively companies are using their assets to generate sales
which of the following is an example of a productivity measure?
inventory turnover
asset turnover
is another term for inventory turnover
inventory turnover
is calculated by dividing cost of goods sold by average inventory
which of the following is expressed as a percentage of net sales?
net profit margin
which of the following statements does NOT describe gross margin?
it is a measure of return on assets
which of the following statements does NOT describe asset turnover?
it suggests the profit management path
which of the following would be the best example of an output measure?
net profits for the store for the year
The formula for calculating gross margin is
net sales minus the cost of goods sold
An appliance store has total assets of $2,800,000, accounts receivable of $900,000, accounts payable of $700,000, inventory valued at $1,500,000, and total liabilities of $2,500,000. In 2016, its net sales were $2,100,000, and its operating profit margin equaled $42,000. Calculate the store's return on assets.
1.5 percent
Alpha is popular loungewear that prides itself on its versatility. Last year, its net sales were $1,750,000 with cost of goods of $390,000. The company's operating expenses totaled $960,000. Calculate the company's net operating profit margin percentage.
22.9 percent
Second Chance is a paperback book exchange. For each book trade, the buyer pays a $1 trade fee. Books that are sold and not traded cost half of their original purchase price. The store has total assets of $126,000 and current assets of $40,200. Its net sales equaled $35,000, and its net profit after taxes was $9,000. Calculate the store's net profit percentage.
25.7%
Melanie's Bead Shoppe has total assets of $45,000, accounts receivable of $2,000, accounts payable of $3,100, and inventory valued at $20,000. Last year, her net sales were $29,000, and her operating profit margin equaled $14,000. What is her return on assets?
31.1 percent
Billie Jean's Bridals has total assets of $350,000, current assets of $74,000, total liabilities of $280,000, accounts receivable of $12,000, net sales of $64,000, and net profit after taxes of $23,000. Calculate the retailer's net profit percentage.
35.9 percent
Calculate the return on assets for a gun shop that has total assets of $410,000, current assets of $74,000, total liabilities of $280,000, accounts receivable of $12,000, net sales of $64,000, and operating profit margin of $30,000.
7.3 percent
Which of the following is an example of a fixed asset for a music store?
A computer that is used to manage the store's inventory
Which of the following would be listed as an asset on the balance sheet for a children's clothing shop?
Accounts receivable
Which of the following statements is not true about the strategic profit model?
It decomposes return on assets (ROA) into net profit and operating expenses.
What is inventory turnover used to evaluate?
It is used to see the speed of the inventory sold
Why would a discount store have a lower gross margin percent than a jewelry store?
Discount stores have a lower priced merchandise strategy.
Operating profit margin is
Gross margin minus operating expenses.
________ are the total revenues received by a retailer that are related to selling merchandise during a given time period.
Net sales
Which of the following assesses the results of a retailer's investments?
Output measures
Why is it important for department stores to achieve a high gross margin?
Their operating expenses are higher than other retail format
which of the following can be considered as a current asset?
accounts receivable
Harriet's Wimsey is a bookstore for people who love mysteries. How would a complete set of P. D. James mystery novels, a first edition copy of The Maltese Falcon, the money in the cash register, and an IOU from a loyal customer who forgot her wallet one day when she came to purchase the newest Dorothy Cannell book be listed on the store's balance sheet?
as current assets
________ equals a company's net sales divided by its total assets.
asset turnover
which of the following is an integral part of the strategic profit model?
asset turnover
If Mohammed wanted to examine the assets and liabilities of the Silver Exchange Coin Shop for the end of the year, he should look at its
balance sheet
The information used to analyze a retailer's asset management path primarily comes from the
balance sheet
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.
bottom-up
which of the following is classified as an asset?
buildings
The amount paid for the merchandise by the retailer is the
cost of goods sold
Of the following, which can be converted into cash within one year?
current assets
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?
decrease selling, general and administrative expenses
_______ gives the retailer a measure of how much profit it is making on merchandise sales without considering the expense associated with operating the store.
gross margin
what measures the profitability of products that are sold?
gross margin
How is gross margin percent calculated?
gross margin divided by net sales
What ratio should a retailer use to best compare the performance of cashmere sweaters versus cotton sweaters?
gross margin percent
When Erica calculates the current assets for her picture framing business, she should not include which of the following?
her account payable
which of the following is NOT a component in the calculation of net sales?
interest
which of the following would be the best example of an input measure?
inventory
