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 the purpose of a retail open-to-buy (OTB) plan?
Answer: Controlling how much inventory a buyer can purchase in a given period
Open-to-buy is a budget control tool that limits purchasing to what is needed based on planned sales, inventory levels, and targets.
Which term describes the practice of selling a product below cost to drive store traffic?
Answer: Loss leader pricing
Loss leader pricing deliberately prices an item below cost to attract shoppers who will then purchase higher-margin products.
A CRA analyst reviews a store's contribution margin. What does this metric represent?
Answer: Revenue minus variable costs, showing profit available to cover fixed costs
Contribution margin is revenue minus variable costs, indicating how much each sale contributes toward covering fixed costs and generating profit.
What is 'dead stock' and why is it a financial concern for retailers?
Answer: Inventory that has not sold for an extended period; it ties up capital and incurs holding costs
Dead stock is unsold inventory that consumes warehouse space and working capital without generating revenue, reducing overall financial performance.
Which financial document summarizes a retailer's revenues and expenses over a specific period?
Answer: Income statement (P&L)
The income statement (profit and loss statement) summarizes revenues, costs, and expenses to show net profit or loss for a reporting period.
When a retail analyst says a promotion was 'incremental,' what does this mean?
Answer: Sales generated were above and beyond what would have occurred without the promotion
Incremental sales are the additional units or revenue directly attributable to a promotional activity, excluding baseline sales that would have happened anyway.