MKT 320 CHAPTER 6, mkt 320 chapter 7, MKT 320 CH 8, marketing chapter 12, marketing chapter 13, marketing chapter 16 and 17yyy

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A

_____ gives the retailer a measure of how much profit it is making on merchandise sales without considering the expense associated with operating the store. A. Gross margin B. Financial leverage C. General expenses D. Expenses E. Net profit

Net sales

_____ are the total revenues received by a retailer that are related to selling merchandise during a given time period.

A

_____ equals a company's net sales divided by its total assets. A. Asset turnover B. Current ratio C. Gross margin D. Net sales margin E. Return on assets

D

_____ is also known as the acid-test ratio. A. Current ratio B. Payout ratio C. Debt-to-equity ratio D. Quick ratio E. Debt-to-capital ratio

D

A store that sells books, magazines, and newspapers has an average inventory of $15,000 at cost. Its cost of goods for the previous year was $62,000, and its net profit was $9,000. Calculate the retailer's inventory turnover. A. 1.67 B. 2.14 C. 6.89 D. 4.13 E. 14.5

C

A supermarket requires a large amount of operating space. Therefore, it is most likely to be located in a: A. shopping mall. B. life-style center. C. freestanding site. D. central business district. E. off-price center.

C

Alpha LLC 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. Taxes totaled $61,650. The company's expenses totaled $960,000. Calculate the company's net after tax profit margin percentage. A. 80.7 percent B. 22.2 percent C. 19.3 percent D. 12.5 percent E. 22.9 percent

D

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 1999, its net sales were $2,100,000, and its operating profit margin equaled $42,000. Calculate the store's return on assets. A. 71.4 percent B. 2.8 percent C. 7.5 percent D. 1.5 percent E. 75 percent

A

As Dean calculates his current assets for his used video game store, he is sure to include which of the following? A. Merchandise inventory B. Accrued liabilities C. Fixed assets D. Notes receivable E. Retained earnings

D

As Leah drove down Fairfax Road, she noticed a group of adjacent stores. In the group, she saw a hair salon, a pizzeria, a supermarket, an optometrist, and a grocery store. All the stores had entrances into a parking lot, which was landscaped with trees and flowers. What type of shopping center is this? A. Mixed-use development center B. Lifestyle center C. Outlet center D. Neighborhood and community shopping center E. Theme/festival center

D

Asset turnover _____. A. is calculated from information found on a firm's income statement B. is calculated by dividing total assets by net sales C. reveals how profitable a company is D. is net sales divided by total assets E. is another term for inventory turnover

B

Because of the principle of _____, no individual Kohl's store should be held financially responsible if the buyers for Kohl's lower prices to get rid of merchandise and sales suffer. A. unity B. accountability C. delegation D. empowerment E. equity

E

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. A. 18.75 percent B. 20 percent C. 25 percent D. 31.1 percent E. 35.9 percent

A

By knowing the return on assets for his bakery shop, Chuck will know: A. how much profit was generated from his investment in assets. B. information found only on his balance sheet. C. information found only on his income statement. D. total assets divided by net profits. E. total assets divided by owners' equity.

C

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. A. 18.3 percent B. 8.2 percent C. 7.3 percent D. 25.0 percent E. 26.5 percent

D

Candle in the Wind LLC is a store for people who enjoy and collect candles to decorate their homes. Last year, its net sales totaled $125,000 with $13,700 in taxes. The cost value of the candles it sold was $42,300. The expenses that the operation has are salaries to the owner and one part-time assistant for $52,000, administrative expenses of $400, and utilities at $900. Calculate the net profit after tax for Candle in the Wind. A. $29,400 B. $17,000 C. $53,300 D. $15,700 E. $16,100

A

Country Homes LLC is a store for people who collect country arts and crafts and use them to decorate their homes. Last year, its net sales totaled $120,500. The cost value of the items it sold was $72,300. Taxes for the year were $7,680. The only expenses that the operation had were (1) rent for $3000, (2) salaries to the owner and one part-time assistant for $27,000, (3) utilities at $1,200, and (4) advertising of $500. Calculate the gross margin percentage for Country Homes. A. 40 percent B. 26.3 percent C. 9.6 percent D. 60.2 percent E. 7.3 percent

A

Melanie's Bead Shoppe LLC 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? A. 31.1 percent B. 12.5 percent C. 7.0 percent D. 22.0 percent E. 48.3 percent

A

How is gross margin percent calculated? A. Gross margin divided by net sales B. Add operating and interest expenses together and divide by gross sales C. Net sales multiplied by gross margin D. Cost of goods sold divided by gross sales E. Divide net profit by net sales

A

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 _____. A. balance sheet B. financial leverage statements C. income statement D. profitability statement E. strategic profit model

B

If the executives for Office Max LLC, a chain of office supply stores, 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

C

If you had $50,000 and you wanted to invest in stocks, you have two options. Which of the following ratios would best help you to decide on your investment? A. Inventory turnover B. Asset turnover C. Return on assets D. Gross profit margin E. Net profit margin

A

In response to a growing trend of workers eating at their work stations, OfficeEase LLC, an Internet retailer, offers a line of products that can be used to protect office equipment and furniture including a plastic sheath for a computer keyboard and a spill-proof cup. Last year, its net sales were $1,450,000 with cost of goods sold for $353,000. The company's expenses, last year, totaled $960,000. Calculate the company's net profit percentage. A. 9.4 percent B. 24.3 percent C. 66.2 percent D. 75.6 percent E. 8.0 percent

C

Inventory turnover: A. is calculated by dividing accounts receivable by net sales B. equals total assets minus current assets divided by average inventory C. is calculated by dividing cost of goods by average inventory D. equals net sales minus cost of goods sold divided by average turnover

D

Jake is looking to rent a retail space in a shopping center for his restaurant business. He is looking for a space of around 250,000 square feet with annual occupancy cost of around $50 per square feet. An ideal space should be high on pedestrian traffic but low on vehicular traffic. Which of the following locations will best suit Jake? A. Neighborhood and community shopping centers B. Power centers C. Regional and super-regional enclosed malls D. Theme/festival centers E. Outlet centers

B

Jake, who runs a video rental shop, finds its rewarding to interact with customers who like movies. Hence, he is recognized in the local community. Which objective of retailing does Jake emphasize by this practice? A. Financial objective B. Personal objective C. Societal objective D. Environmental objective E. Administrational objective

E

James, a store manager, works at Fresco LLC. His store is located in the traditional downtown financial business area in the city. In which of the following classifications of retail locations is James' store located? A. Semi-urban area B. Gentrified residential area C. Inner city D. Main street E. Central business district

E

Michaels sets goals at the top of the organization. Then, 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

A

Of the following, which can be converted into cash within one year? A. Current assets B. Fixed assets C. Accrued assets D. Accountable assets E. Substantial assets

E

On his way home from work, Phil stopped at a shopping center. He parked in front of the dry cleaner, where he could pick up his suit. He did not have to move his car because next door was a gift shop where he could pick up a gift for his niece. Conveniently enough, next door to that store was a supermarket, where he purchased essentials like milk and cornflake cereal. Phil was shopping in what type of shopping center? A. Lifestyle center B. Mixed-use development center C. Enclosed shopping mall D. Power center E. Neighborhood center

earnings before interest, taxes, and depreciation (EBITDA).

Operating profit margin is also known as:

D

Second Chance LLC 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. A. 7.1% B. 21.7% C. 22.4% D. 25.7% E. 27.7%

B

The Bookstore Café is a small restaurant located in a downtown business district. It is opened for breakfast and lunch and serves simple yet nutritious meals as well as books from the New York Times bestseller list. How would you categorize the book inventory, cooking equipment, tables, chairs, and the register? A. As retained earnings B. As assets C. As current liabilities D. As investor capital E. As owners' equity

A

The amount paid for the merchandise by the retailer is the: A. cost of goods sold. B. gross margin. C. operating expense. D. fixed expense. E. variable expense.

E

The executives for New Haus LLC 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

A

The formula for calculating gross margin is: A. net sales minus the cost of the goods sold. B. gross sales plus the cost of goods sold. C. net sales minus gross sales plus the cost of goods sold. D. gross sales minus the cost of goods sold. E. net sales plus the cost of goods sold.

C

The formula for calculating operating expenses percentage is: A. total sales/operating expenses. B. gross sales/operating expenses. C. operating expenses/net sales. D. average sales/gross sales. E. total sales/average sales.

E

The formula to calculate quick ratio is: A. (long-term assets-long-term liabilities)/inventory B. (short-term assets-long-term liabilities)/inventory C. (long-term assets-short-term liabilities)/inventory D. (short-term assets-inventory)/long-term liabilities E. (short-term assets-inventory)/short-term liabilities

B

The hosting of a website for the purpose of online retailing would be classified as a(n): A. cost of goods sold. B. operating expense. C. promotional allowance. D. profit center. E. asset productivity center.

C

The information used to analyze a firm's profit path comes from the: A. balance sheet. B. profitability statement. C. income statement. D. strategic profit model. E. financial leverage statement.

E

The information used to analyze a retailer's asset management path primarily comes from the _____. A. strategic profit model B. financial leverage statement C. income statement D. profitability statement E. balance sheet

D

The inner city is a _____. A. high-income commercial area within a large city B. low-income commercial area within a small city C. high-income residential area within a small city D. low-income residential area within a large city E. high-income commercial area within a small city

A

The maintenance of common facilities, security, advertising, and special events to attract consumers are handled by the shopping center management and are covered under _____ costs. A. common area maintenance B. community coverage C. location revival D. uniform code E. development preservation

B

The major retailers, typically a large department store or big-box store in a shopping center is referred to as the _____ store. A. parasite B. anchor C. location rival D. leader E. alpha

B

The retailers that attract a significant number of consumers and consequently make the center more appealing for other retailers are _____ stores. A. parasite B. anchor C. location rival D. leader E. alpha

operating profit margin percentage and asset turnover.

The strategic profit model decomposes ROA into two components:

E

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.

D

There are many Kroger supermarkets. Because of the principle of _____, no individual store should be held financially responsible for the upkeep of the supermarket's headquarters in Cincinnati, Ohio, or for the salary of the CEO. A. unity B. empowerment C. delegation D. accountability E. equity

income statement.

Tony wanted to know what the net sales and the net profit after tax were last year for his nephew's business, The Big Guy Shop Inc. Tony should look at the store's:

E

Which of the following is a disadvantage of main street locations? A. High occupancy cost B. Heavy pedestrian traffic C. Heavy vehicular traffic D. Wide range of entertainment and recreational activities to choose from E. Small overall draw

E

Which of the following is an advantage of freestanding locations? A. Unlimited trade area B. High pedestrian traffic C. Light pedestrian traffic D. Less expensive compared to shopping centers E. High vehicular traffic

B

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

B

Which of the following is an integral part of the strategic profit model? A. Retained earnings B. Asset turnover C. Inventory turnover D. Current liabilities E. Gross margin

B

Which of the following is expressed as a percentage of net sales? A. Accounts receivable B. Net profit margin C. Gross sales D. Operating expenses E. Total assets

D

Which of the following is not a component in the calculation of net sales? A. Gross sales B. Customer returns C. Promotional allowances D. Interest

A

Urban customers typically place more importance on _____. A. reducing their shopping time B. diversity of the retailer's assortment C. reducing their shopping expense D. finding better bargains E. getting all possible alternatives

D

What does asset turnover measure? A. It is the retailer's gross sales divided by its net sales. B. It is the retailer's total productivity divided by net sales. C. It is the retailer's average productivity divided by gross sales. D. It is the retailer's net sales divided by its assets. E. It is the retailer's total productivity divided by gross sales.

A

What is inventory turnover used to evaluate? A. It is used to see how quickly retailers sell their investment in inventory. B. It is used to calculate net sales. C. It is used to measure average inventory. D. It is to see how effectively buyers purchase the right assortments.

A

What is net profit? A. Operating profit less interest, taxes, and depreciation B. COGS less operating expenses C. Gross sales minus net sales D. A measurement of the liquidity of the firm E. Net sales minus the cost of goods sold

B

What is wrong with the following performance objective which was set by a retailer that specializes in advertising collectibles: "To increase sales by three percent on a $400,000 investment in inventory and real estate"? A. The objective is not qualitative. B. The objective lacks a specific time frame. C. The objective does not state the resources needed to accomplish it. D. The objective is not measurable. E. The objective is stated appropriately.

C

What is wrong with the following performance objective written for a shop specializing in furs: "To earn $1,000,000 in profit during calendar year 2011"? A. The objective is not qualitative. B. The objective lacks a specific time frame. C. The objective does not state the resources needed to accomplish it. D. The objective is not measurable. E. The objective is stated appropriately.

C

What measures the profitability of products that are sold? A. Accounts receivable B. Asset turnover C. Gross margin D. Owner's equity E. Shrinkage

B

What ratio should a retailer use to best compare the performance of cashmere sweaters versus cotton sweaters? A. Cost of goods sold percent B. Gross margin percent C. Operating expense percent D. Fixed expense percent E. Variable expense percent

E

What ratio would an investor use to determine the financial health and risk of bankruptcy of a retailer? A. Stock to sales ratio B. Inventory turnover C. Operating expense percent D. Current ratio E. Debt-to-equity ratio

E

When Chris charges a gallon of chlorine for his pool at Pinch-A-Penny to his store account, he creates a(n) _____ for the retailer. A. long-term liability B. accounts payable C. notes receivable D. notes payable E. accounts receivable

A

Where is a central business district typically located? A. Downtown area B. Rural area C. Semi-urban area D. Airport E. Shopping malls

D

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

C

Which of the following has to be taken into consideration while calculating current ratio? A. Long-term loans B. Buildings C. Short-term loans D. Machinery E. Human assets

B

Which of the following is a disadvantage of freestanding sites? A. Hard to access B. Limited trade area C. Heavy restrictions D. Low vehicular traffic E. Low visibility

E

Which of the following is not an example of a fixed asset for a lawn care service? A. The trailer used to haul away debris B. The plant nursery owned by the service C. The bucket truck it uses to trim trees D. A computer which is used to manage the store's inventory E. Its accounts receivable

D

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

C

Which of the following locations is typically the best for a supermarket? A. Regional and super-regional enclosed malls B. Lifestyle centers C. Neighborhood and community shopping centers D. Outlet centers E. Theme/festival centers

D

Which of the following measures the retailer's ability to pay its suppliers with assets such as cash and accounts receivable? A. Cost of goods sold percent B. Gross margin percent C. Operating expense percent D. Current ratio E. Variable expense percent

D

Which of the following statements does not describe asset turnover? A. It is the retailer's net sales divided by its assets. B. It assesses the productivity of a firm's investments in its assets. C. It indicates how many sales dollars are generated by each dollar of asset. D. It suggests the profit management path.

E

Which of the following statements does not describe gross margin? A. It can be expressed as a percentage of net sales. B. It is the profit on the goods sold excluding the operating expenses. C. It is also referred to as gross profit. D. It is a performance measurement. E. It is a measure of return on assets.

C

Which of the following statements is a reason why U.S. retailers avoid opening stores in the inner city? A. The retailers keep away from the inner city because of the rising cost of real estate. B. The retailers keep away from the inner city because of stringent government regulations. C. The retailers think these stores are riskier and produce lower returns than other areas. D. The retailers keep away from the inner city because of the lack of competent human resources. E. The retailers keep away from the inner city because of complications in the supply chain.

E

Which of the following statements is not a responsibility of the shopping center property management firm? A. Maintain the parking lots. B. Ensure that the parking lot has good lighting. C. Maintain the outdoor signage for the shopping center. D. Create special events to attract customers to the shopping center. E. Provide temporary holiday sales staff for retailers.

C

Which of the following statements is not true about the strategic profit model? A. It is a method for summarizing the factors that affect a firm's financial performance. B. It indicates the impacts of factors affecting a firm's return on assets (ROA). C. It decomposes return on assets (ROA) into net profit and operating expenses. D. It illustrates the different approaches for achieving a high return on assets (ROA). E. It suggests profit management path and asset management path.

B

Which of the following statements is true of central business districts? A. It has low pedestrian traffic. B. It has limited vehicular traffic. C. It provides inexpensive retail space. D. The shopping flow is fast during weekends. E. The shopping flow is fast during evenings.

A

Which of the following statements is true of current ratio? A. It evaluates the retailer's ability to pay its short-term debt obligations. B. It evaluates the optimal profitability of the retailer. C. It evaluates the optimal productivity of the retailer. D. It evaluates the cost incurred by human resources against organizational profitability. E. It evaluates the retailer's ability to pay its long-term debt obligations.

B

Which of the following statements is true of debt-to-equity ratio? A. It measures the total cost of manpower relative to the organizations total productivity. B. It measures how much money a company can safely borrow over long periods of time. C. It measures the cost of employee benefits relative to individual productivity. D. It measures the organization's profitability against its productivity. E. It measures how much money a company can safely lend over long periods of time.

C

Which of the following would be listed as an asset on the balance sheet for a children's clothing shop? A. Interest due on startup loan B. Retained earnings C. Accounts receivable D. Money owed to vendors

A

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

E

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

E

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

E

Which of the following would not be listed as an asset on the balance sheet of a hardware store? A. Nuts and bolts B. A set of metric wrenches C. Display cabinets D. A $55 credit card charge from a store patron E. Accounts payable

A

Why is it important for department stores to achieve a high gross margin? A. Their operating expenses are higher than other retail formats. B. It is stated in the store's financial objectives. C. Without a high gross margin, department stores will be unable to achieve a high asset turnover. D. The strategic profit model will otherwise change the strategy of the retailer. E. A low gross margin will turn it into a discounter.

D

Why would a discount store have a lower gross margin percent than a jewelry store? A. Discount stores are only beginning to explore gross margin in pricing decisions. B. Jewelry stores cannot offer the variety that discount stores offer. C. Discount stores traditionally do not profit as well as jewelry stores. D. Discount stores have a lower priced merchandise strategy.

net sales-COGS

gross margin=

operating profit margin-extraordinary expenses or income-interest-taxes

net profit margin

gross sales+promotional allowances-customer returns

net sales=

gross margin-operating expenses

operating profit margin=

input measures

resources or money allocated to achieve sales

input tmeasures

resources or money allocated to achieve sales

operating expenses

the costs associated with the normal course of doing business

productivity measures

the ratio of outputs to inputs

output measures

the results of the retailers investment decisions


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