Chap 4

In the Ch. 4 Analysis Questions assignment, you calculated four profitability ratios for NETGEAR and Cisco: the Average Markup Percent, the Gross Profit Percent, the Operating Profit Margin, and the Net Profit Margin.  Based on these ratios, we found that Cisco was more profitable than NETGEAR over the most recent fiscal year.

1) Name three types of stakeholders (include an IT manager, and two other types of stakeholders) who would be affected by the profitability ratios you calculated. (If you need help remembering the different types of stakeholders, see Exhibit 2 in Chapter 1 of your textbook.)

And, considering all the ratios together, for each type of stakeholder you name, explain at least one way that stakeholder might be affected by the results of these ratios. In other words, explain why each stakeholder you mentioned would care about the profitability of the companies.

2) Choose one of the types of stakeholders you named and describe one decision that stakeholder could make that would positively affect one of the ratios in the future.  Include an example of the impact on the ratio, using hypothetical numbers.