In 2014, Company A reported profits of about $41 billion on sales of $243 billio

Question

In 2014, Company A reported profits of about $41 billion on sales of $243 billion. For that same period, Company B posted a profit of about $16 billion on sales of $87 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 marketin 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 retum on sales (or marketing ROS), and marketing return on investment (or marketing ROI) for each company g efforts in Company A Company B $242,514,000 $86,809,000 $70,008,000 $46,226,000 Marketing Expenses $8,517,950 $13,693,000 Net Income (Profit) $41,277000 $15,975,000 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 ACompany B Profit Margin

Explanation / Answer

Calculate profit margin :

Company A Company B Profit margin 41277000*100/242514000 = 17.02% or 17% 15975000*100/86809000 = 18.40% or 18%

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