NEW MyLab Finance with Pearson eText -- Access Card -- for Fundamentals of Corporate Finance
NEW MyLab Finance with Pearson eText -- Access Card -- for Fundamentals of Corporate Finance
3rd Edition
ISBN: 9780133543889
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Chapter 2, Problem 22P

In fiscal year 2011, Starbucks Corporation (SBUX) had revenue of $11.70 billion, gross profit of $6.75 billion, and net income of $1.25 billion. Peet’s Coffee and Tea (PEET) had revenue of $372 million, gross profit of $72.7 million, and net income of $17.8 million.

  1. Compare the gross margins for Starbucks and Peet’s.
  2. Compare the net profit margins for Starbucks and Peet’s.
  3. Which firm was more profitable in 2011?

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With the information provided in the image: Prepare a multi-step income statement. Calculate the company's return on sales ratio.
In 2013, Company A reported profits of about $11 billion on sales of $19 billion. For that same period, Company B posted a profit of about $525 million on sales of $2.0 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' incomes 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 both companies. Which company is performing better? Company A $18,714,700 $10,443,300 $1,491,400 Marketing Expenses Net Income (Profit) $10,943,200 Fill in the table below. (Round the NMC to the nearest whole number and all other values to one decimal place.) Company A Company B Sales Gross Profit…

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NEW MyLab Finance with Pearson eText -- Access Card -- for Fundamentals of Corporate Finance

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