Financial Ratios and The Analysis of Marketing Policy

Discusses the analysis that financial ratios have won lots of attention in the accounting and financial literature. Demonstrates how financial ratios can be used in order to analyse certain aspects of a firm's marketing policy. Adopts the idea that accounting ratios are affected by the firm's marketing management philosophy. Validates results obtained for the ratios supposedly being affected by the firm's consumer service policy and uses other accounting figures, e.g. cash management. Presents financial data for a set of UK companies examining the impact of their marketing policy on the behaviour of financial ratios, and carries out a cross‐section analysis over time. Uses mathematical equations to explain the methodology, results and interpretation and freely employs tables to further emphasize points within. Sums up that in this study high levels of the marketing policies are associated with higher levels of operating profitability.