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Score: 0 of 1 pt 1 of 1 (0 complete) > HW Score: 0%, 0 of 1 pt Metrics 2.1 Question Help In 2014, Company A reported profits of about $51 billion on sales of $258 billion. For that same period, Company B posted a profit of about $26 billion on sales of $85 bilion. 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 ROl) for each company Company ACompany B $257,753,000 $84,838,000 $66,496,000 $48,681,000 Marketing Expenses$6,891,050$15,271.400 Net Income (Profit) $51.246,000$25,958,000 Sales Gross Profit Fill in the table below. (Round the NMC to the nearest whole number and all other values to two decimal places.) Company A 19.88% Company B 30.60% Profit Margin NMC

Explanation / Answer

Profit Margin is already calculated.

Net Marketing Contribution (NMC) = Sales - COGS -Marketing Expenses

Marketing Return on Sales or Marketing ROS = Net Marketing Contribution / Net Sales

Marketing Return on Investment or Marketing ROI = Net Marketing Contribution / Marketing Expenses

___________________________________________________________________________________

NMC:

Company A: $257,753,000 - $66,496,000 - $6,891,050 = $184,365,950

Company B: $84,838,000 - $48,681,000 - $15,271,400 = $20,885,600

Marketing ROS :

Company A: $184,365,950/$257,753,000 = 0.71528 = 0.71

Company B: $20,885,600/$84,838000 = 0.24618 = 0.25

Marketing ROI:

Company A: $184,365,950/$6,891,050 = 26.7544 times = 26.75

Company B: $20,885,600/$15,271,400 = 1.3676 times = 1.37

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Hope this is helpful!!

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