CRA Retail Financial Analysis & Metrics Flashcards
6 cards from real CRA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CRA Retail Financial Analysis & Metrics flashcards as text
What is GMROI and what does it evaluate?
Answer: Gross Margin Return on Inventory Investment — profitability of inventory investment
GMROI (Gross Margin Return on Inventory Investment) measures how much gross profit is earned for every dollar invested in inventory.
A retailer's operating expense ratio increased while revenue was flat. What is the likely financial impact?
Answer: Compressed operating profit margins
When operating expenses grow as a share of flat revenue, operating profit margins shrink because costs are consuming more of each sales dollar.
What does 'weeks of supply' (WOS) indicate in retail planning?
Answer: How many weeks current inventory will last at the current sales rate
Weeks of supply is calculated as on-hand inventory divided by average weekly sales rate, showing how long stock will last.
Which pricing strategy sets prices based on what competitors charge for similar products?
Answer: Competitive pricing
Competitive pricing benchmarks prices against competitors to stay in line with or undercut the market, regardless of internal costs.
What is markdown optimization in retail financial planning?
Answer: Strategically timing and sizing price reductions to maximize sell-through and margin
Markdown optimization uses analytics to determine the best timing, depth, and sequence of price reductions to clear inventory while preserving margin.
In retail, what does 'return on investment' (ROI) for a promotional event measure?
Answer: Net profit generated by the promotion relative to its cost
Promotional ROI compares the incremental net profit earned during a promotion to the cost of running it, expressed as a percentage.