Exam 22: Financial Analysis in Marketing

Venus Inc.,a software consultancy firm,had made a gross profit of $350.0 million for the year 2012.For the same year,it had made sales of $890.0 million.What was its gross profit margin?

Venus Inc.,a software consultancy firm,had depreciation of $20.8 million and a net interest expense of $3.2 million for the past year.The firm's operating profit for the same year was $319.0 million.What was the firm's taxable income for the past year?

An income statement is a snapshot of what a company owns (called assets)and what it owes (called liabilities)at a point in time.

Depreciation is an unusual expense because it does not involve an actual cash expense.

The difference between assets and liabilities of a company is referred to as owner's equity.

While calculating the accounts receivable turnover ratio,sales to buyers using credit cards like MasterCard and Visa are counted as credit sales because the seller is providing credit to the buyer who buys without cash.

Which of the following statements is true of markup?

Subtracting depreciation and net interest expense from the firm's operating profit reveals the firm's taxable income.

The gross profit margin is the percentage of each sales dollar that a firm earns in profit after all expenses have been paid.

In the context of financial statements,which of the following represents the systematic reduction over time in the value of certain company assets?

Explain the difference between an income statement and a balance sheet.

Calculate the markdown if a retailer decides to reduce the price of an item from $45 to $38 and sells 500 units.

Cost of goods sold represents the revenue a firm receives from goods sold to customers.

What is a markup? What are the two marketing decisions that decide the amount of markup? Explain why a markup is important to a marketer.

A balance sheet contains more marketing-related information than an income statement.

Which of the following profitability ratios measures the firm's efficiency in generating sales and profits from the total amount invested in the company?

Receivables are collected credit sales.

All successful organizations have the same inventory turnover ratio.