exam 2 retailing part 3

The cash conversion cycle indicates:

B. How many days it takes to turn inventory purchases to cash.

cost of goods sold

B. The amount a retailer pays for its merchandise

If a toy store has $10,000 in inventory in month 1, $50,000 in inventory in month 2 and $25,000 in inventory in the third month, what is the average inventory amount?

$28,333

If a retailer knows the stock-to-sales ratio is 1.5 and plans for $20,000 in sales, what will the beginning of month (BOM) be?

$30,000n

If current liabilities are $75,000 and current assets are $150,000, what is the current ratio?

2 to 1

If a company has a net worth of $500,000 and total liabilities of $250,000, what is their debt-to-equity ratio?

5 to 1

Which of the following statements is true?

A. Rail service is typically better for larger retailers compared to smaller retailers.

How would one calculate open-to-buy (at retail)?

A. Take planned purchases - purchase commitments

The Economic Order Quantity was calculated for a particular brand of shoes. The number turned out to be 98. What does this number mean?

B. The retailer should order 98 pairs of shoes every time it places an order.

Wal-Mart is the only retailer with rights to sell:

B. White Cloud bathroom tissue

Compared to private brands, national brands tend to have a _________ but are ________.

B. smaller profit margin; supported with national advertising.

Which of the following is one of the variables to calculate GMROI?

C. Both net sales and average inventory at cost

Horizontal Analysis

C. Uses comparative balance sheets for two years

Liquidity ratios reflect management's control of

D. current assets and current liabilities

Primary statements or reports found in a retail accounting system include which of the following?

a balance sheet

The merchandise manager is responsible for which of the following tasks?

all

The merchandise mix consists of which of the following?

all

Which of the following is a question that a retailer should answer before choosing a supplier?

all

Which of the following statements about cash flow is correct?

all

Which of the following is not a liability?

depreciation

A cash conversion cycle of -2 means:

none

If a retailer's turnover rate is less than _____, the basic stock and percentage variation methods will yield approximately the same results.

none

Which of the following is a category on the income statement?

none

A buyer wants to calculate how much money will be left to spend on a new line of shoes. He/She will calculate:

open-to-buy

Which of the following is not a major objective of creating a financial plan:

target marketing