6 K←Company A's sales last year were roughly double Company B's sales, and its profits were nearly 50% higher. So, Company A is a better marketer, right?Sales and profits allow us to compare the profitability of these two companies. Between these two numbers lies information regarding the efficiency of marketing efforts by each firm. Using thefollowing information from the companies' income statements (all numbers are in millions), calculate the net profit percentage (also called profit margin), net marketing contribution (NMC), marketingreturn on sales (ROS), and marketing return on investment (ROI) for both companies. Based on these calculations, which company is the better marketer?Net Sales (in millions)Cost of Goods Sold (in millions)Gross Profit (in millions)Total Marketing Expenses (in millions)Other (Non-Marketing) Expenses (in millions)Complete the table. (Round to one decimal place.)Net Profit Before Taxes (in millions)Net Profit PercentageNMC (in millions)Marketing ROSMarketing ROICompany A57,523.234.310.77.7Company A%%%Company B28.611.816.84.13.8Company B%%%

Net Marketing Contribution (NMC): It measures the profitability of a product or service after…

Answered: Company A's sales last year were…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter5: Evaluating Operating And Financial Performance

Section: Chapter Questions

Problem 1EP

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In 2014, Company A reported profits of about $41 billion on sales of $332 billion. For that same period, Company B posted a profit of about $16 billion on sales of $114 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 $331,628,000 $71,660,000 $8,002,250 $40,648,000 Company B $113,609,000 Sales Gross Profit Marketing Expenses" $57,453,000 $12,356,000 Net Income (Profit) $15,707,000 Fill in the table below. (Round the NMC to the nearest whole number and all other values to two decimal places.)…
Last year, Company A reported profits of about $47 billion on sales of $282 billion. For that same period, Company B posted a profit of about $22 billion on sales of $113 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. Hint: See the Marketing Profitability Metrics section of Appendix 3: Marketing By The Numbers in your textbook. Sales Gross Profit Company A $281,822,000 $66,558,000 $8,264,050 $46,962,000 Profit Margin Marketing Expenses Net Income (Profit) Fill in the table below. (Round the NMC to the…
5. Profitability ratios Profitability ratios help in the analysis of the combined impact of liquidity ratios, asset management ratios, and debt management ratios on the operating performance of a firm. Your boss has asked you to calculate the profitability ratios of Diusitech Inc. and make comments on its second-year performance as compared with its first-year performance. The following shows Diusitech Inc.'s income statement for the last two years. The company had assets of $4,700 million in the first year and $7,518 million in the second year. Common equity was equal to $2,500 million in the first year, and the company distributed 100% of its earnings out as dividends during the first and the second years. In addition, the firm did not issue new stock during either year. Diusitech Inc. Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 Year 1 2,540 2,000 1,610 1,495 127 80 1,737 803 80 723 181 542 Net Sales Operating costs except depreciation and…
Which of the following statements are true about profitability ratios? Check all that apply. If a company has a net profit margin of 10%, it means that the company earned a net income of $0.10 for each dollar of sales. If a company’s operating margin increases but its profit margin decreases, it could mean that the company paid more in interest or taxes. An increase in the return on assets ratio implies an increase in the assets a firm owns. If a company issues new common shares but its net income does not increase, return on common equity will increase.
PLease show Solutions for a guide. 1. A firm total sales is 156,000 this year. If the cost of sales is 55% . What is the amount of gross profit? 2. If the firm above earned a profit of 39,000 . How many percent of total sales is the net profit? 3. Compute for the operating expenses of the firm 1 and 2. How many percent of the total sales are the operating expenses?
Compute for the ratio that measures the margin of sales of Nezuko Inc. is achieving? Format of answer: if answer is 10%, write here 10%
The following information is available to you for the Wooden Company: 2011 2010 Net Income. 53,394 39,510 Net Sales 233,715 182,795 From the information provided, calculate Wooden’s profit margin ratio for each year. Be sure to show your calculations. 2011 2010 Comment on the results, assuming that the industry average for the profit margin ratio is 25% for each of the two years.
Using Pfizer’s Income Statement, perform a horizontal analysis and answer the following questions: 1. What can you say about the company’s performance throughout the years? 2. What can you say about the sales performance of the company from 2008 to 2009? Research on what could have happened during that period which led to the results of your horizontal analysis?
1. The annual net income of MAC Industries since 2005 is given below. Years t (since 2005) Net Income 1 4 6 12 15 $1,500 $2,500 $2,875 $2,850 $2,250 a. Create a scatter plot that includes your curve of best fit on top of the data. You should try several functions and make your choice based on best r-squared value. b. Find the year that Net Income was at its highest point. c. What was the income in that year?
IBM reports that, for the years 2009 and 2008, the gross profit margins are 45.72% and 44.06% respectively. Both the net profit and the gross profit margins indicated stronger financial positions for IBM from 2008 until 2010. Which one of the following equations would IBM have used to calculate the gross profit margins? Select one: a. Gross profit/Sales x 100/1 b. Net income/Sales x 100/1 c. Gross profit/Net income x 100/1 d. Sales/Gross profit x 100/1
Thank you for that, it actually coincides with what I think. However, could you please calculate the breakeven points and give an explanation of what they mean to the director. Also, could you please calculate the sales activity to reach a target profit of 20,000
Refer to the information for Jasper Company on the previous page.Required:1. Prepare an income statement for Jasper for last year. Calculate the percentage of sales for eachline item on the income statement. (Note: Round percentages to the nearest tenth of a percent.)2. CONCEPTUAL CONNECTION Briefly explain how a manager could use the incomestatement created for Requirement 1 to better control costs.

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