Question
In 2014, Company A reported profits of about $40 billion on sales of $238 billion. For that same period, Company B posted a profit of
In 2014, Company A reported profits of about $40 billion on sales of $238 billion. For that same period, Company B posted a profit of about $15 billion on sales of $88 billion. So Company A is a better marketer, right? Sales and profits provide information to compare the profitability of these two competitors, but between these numbers is information regarding the efficiency of marketing efforts in creating those sales and profits. Using the following information from the companies' income statements (all numbers are in thousands), calculate profit margin, net marketing contribution, marketing return on sales (or marketing ROS), and marketing return on investment (or marketing ROI) for each company. Company A Company B Sales $237 comma 988 comma 000237,988,000 $87 comma 507 comma 00087,507,000 Gross Profit $69 comma 104 comma 00069,104,000 $50 comma 604 comma 00050,604,000 Marketing Expenses $7 comma 237 comma 2507,237,250 $15 comma 190 comma 30015,190,300 Net Income (Profit) $40 comma 123 comma 00040,123,000 $15 comma 265 comma 00015,265,000 Fill in the table below. (Round the NMC to the nearest whole number and all other values to two decimal places.) Company A Company B Profit Margin 16.8616.86% 17.4417.44%
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