Questions and Answers
Operating expenses would include all of the following except:
What does a decrease in same-store sales indicate?
That the retailer's business approach is not being well received by its customers.
Store managers focus on what type of performance input?
Utility expenses
What is used to obtain information to analyze a retailer's profit margin management path?
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What term describes the resources or money allocated by a retailer to achieve outputs?
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What would happen if Nordstrom were to decrease the dollar amount of inventory in its stores?
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What is the best financial performance measurement to utilize when evaluating a retailer?
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Buildings, display fixtures, delivery trucks, cash registers, and computers are examples of retailer's _____ assets.
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What is the measurement of how much profit the retailer is making on just the merchandise sold?
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In fulfilling his objectives, what type of objectives does an illustrator fulfill when converting stories into picture books?
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What objectives does a food retailer fulfill by buying 80% of his stock from local producers?
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What is true of setting objectives in a large retail organization?
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Accounts receivable and merchandise inventory are examples of retailer's _____ assets that can be converted into cash within one year.
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What is the operating profit margin also called?
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What is the best method to analyze the performance of one retailer compared to another due to variations in size and decisions?
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What does net profit margin equal?
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What is primarily used to obtain information to analyze a retailer's asset management path?
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What is the best benchmark for the off-price retailer Ross?
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Sales revenue, gross margin, and net profit margin are all examples of retailers' _____ measures.
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Calculate the operating profit percentage if last year, a retailer had net sales of $180,000, cost of goods sold of $70,000, and operating expenses of rent for $4,000, payroll of $20,000, utilities of $2,000, and advertising of $1,200.
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Study Notes
Operating Expenses and Profits
- Shipping expenses from vendor to retailer are not considered operating expenses.
- A decline in same-store sales suggests a retailer's strategy is failing to resonate with customers.
- Store managers monitor utility expenses as a key performance indicator.
Financial Statements and Measurements
- The income statement is crucial for analyzing a retailer's profit margin management.
- Operating profit margin percentage could negatively affect if inventory dollar amount decreases.
- Net margin is the preferred measurement for evaluating retailer performance.
Retailer Assets
- Examples of fixed assets include buildings, display fixtures, delivery trucks, cash registers, and computers.
- Gross margin measures profit from merchandise sold.
- Current assets like accounts receivable and merchandise inventory can be converted into cash within a year.
Objectives and Performance Analysis
- Retailers may focus on societal objectives by sourcing locally and employing regional workers.
- In a top-down organizational approach, individual performance objectives aggregate to form overall performance objectives.
- The best comparison between retailers should be based on operating profit percentage due to differences in size and structures.
Profit Margins and Outputs
- Net profit margin derives from subtracting taxes and interest from the operating profit margin.
- The balance sheet aids in analyzing a retailer's asset management strategy.
- Sales revenue, gross margin, and net profit margin are examples of output measures in retail.
Benchmarking and Calculations
- For off-price retailers, T J Maxx serves as the best benchmarking example.
- Example calculation revealed that a retailer with net sales of $180,000 and operating expenses can achieve a 46% operating profit percentage.
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Description
Test your knowledge on key concepts of retail management with this quiz. From operating expenses to same-store sales, explore important terms and their definitions. Perfect for students studying retail operations and management.
