Question 1

Which of the following is not an example of a fixed asset for a lawn care service?

Accepted Answer

Buildings, stocks, and equipment, which cannot be converted into cash quickly, are fixed assets.

Question 2

Which of the following would be a fixed asset?

Accepted Answer

Fixed assets require more than a year to convert to cash. Examples would be owned buildings, distribution centers, display fixtures, and equipment.

Question 3

Which of the following would be the best example of an input measure?

Accepted Answer

Input measures are the resources or money allocated by a retailer to achieve outputs, or results. For example, the amount and selection of merchandise inventory, the number of stores, the size of the stores, the employees, advertising, markdowns, store hours, and promotions all require managerial decisions on inputs. Inventory is an input measure, while all other choices are output measures.

Question 4

Which of the following is an example of a fixed asset for a music store?

Accepted Answer

Fixed assets require more than a year to convert to cash. Examples would be owned buildings, distribution centers, display fixtures, and equipment.

Question 5

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?

Accepted Answer

Since gross margin - selling, general and administrative expenses = net operating profit then decreasing the SG&A would improve the net operating profit margin plan.

Question 6

Which of the following is used to assess overall performance at a corporate level?

Accepted Answer

A commonly used measure of overall performance is comparable-store sales growth (also called same-store sales growth), which compares sales growth in stores that have been open for at least one year. Growth in sales can result from increasing the sales generated per store or by increasing the number of stores. Growth in same-store sales assesses the first component in sales growth and thus indicates how well the retailer is doing with its core business concept.

Question 7

________ is a method entrepreneurs use to raise money from various individuals to support a particular project.

Accepted Answer

Crowdfunding, or crowdsourcing, raises money to support a particular project by convincing a large group of people to donate money, often in relatively small amounts.

Question 8

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.

Accepted Answer

Bottom-up planning involves lower levels in the company developing performance objectives that are aggregated up to develop overall company objectives. Buyers and store managers estimate what they can achieve, and their estimates are transmitted up the organization to the corporate executives.

Question 9

________ equals a company's net sales divided by its total assets.

Accepted Answer

Asset turnover is net sales divided by total assets. The ratio indicates how many dollars are generated for each dollar of assets.

Question 10

The strategic profit model is useful to retailers because it

Accepted Answer

Both net profit margin and asset turnover are important to evaluate.

Question 11

Grocery stores charging their vendors for space in their stores is referred to as a

Accepted Answer

Grocery stores will often charge their vendors a stocking fee or slotting allowance to have space in their stores.

Question 12

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?

Accepted Answer

Top-down planning means that the goals are set at the top of the organization and are passed down to the lower operating levels.

Question 13

Which of the following would be the best example of an output measure?

Accepted Answer

Output measures assess the results of a retailer's investment decisions. For example, sales revenue, gross margin, and net profit margin are all output measures and ways to evaluate a retailer's input or resource allocation decisions.

Question 14

Which of the following assesses the results of a retailer's investments?

Accepted Answer

Output measures assess the results of a retailer's investment decisions.

Question 15

Inventory turnover

Accepted Answer

Inventory turnover is COGS during a time period, typically a year, divided by the average level of inventory (expressed at cost) during the time period.

Question 16

Which of the following is an example of a productivity measure?

Accepted Answer

A productivity measure determines how effectively retailers use their resources; it is the ratio of an output to an input. Since inventory turnover is cost of goods/average inventory, it is a productivity measure.

Question 17

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.

Accepted Answer

Top-down planning means that the goals are set at the top of the organization and are passed down to the lower operating levels.

Question 18

Which of the following would be the best example of an output measure?

Accepted Answer

Output measures assess the results of a retailer's investment decisions. For example, sales revenue, gross margin, and net profit margin are all output measures and ways to evaluate a retailer's input or resource allocation decisions.

Question 19

If a retailer's gross margin is tracking below plan, which of these options would increase their gross margin?

Accepted Answer

Since net sales - cost of goods sold = gross margin, decreasing cost of goods of sold would increase gross margin.

Question 20

Asset turnover

Accepted Answer

Asset turnover is net sales divided by total assets. The ratio indicates how many sales dollars are generated for each dollar of assets.

Quiz 6: Financial Strategy

Which of the following is not an example of a fixed asset for a lawn care service?

Which of the following would be a fixed asset?

Which of the following would be the best example of an input measure?

Which of the following is an example of a fixed asset for a music store?

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?

Which of the following is used to assess overall performance at a corporate level?

________ is a method entrepreneurs use to raise money from various individuals to support a particular project.

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.

________ equals a company's net sales divided by its total assets.

The strategic profit model is useful to retailers because it

Grocery stores charging their vendors for space in their stores is referred to as a

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?

Which of the following would be the best example of an output measure?

Which of the following assesses the results of a retailer's investments?

Inventory turnover

Which of the following is an example of a productivity measure?

Which of the following would be the best example of an output measure?

If a retailer's gross margin is tracking below plan, which of these options would increase their gross margin?

Asset turnover