Compare Alibaba Groups gross profit margin ratio and net profit margin ratio that you calculated in Question
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Question:
Compare Alibaba Group’s gross profit margin ratio and net profit margin ratio that you calculated in Question 4 with the following ratios from Amazon, eBay, and JD.com for the year ended December 31, 2013.
Gross Profit Margin Ratio | Net Profit Margin Ratio | |
Amazon | 27.23% | 0.37% |
eBay | 68.62% | 17.80% |
JD.com | 9.87% | -0.07% |
a. From the perspective of their business models, provide explanations for the differences in gross profit margin ratios among Alibaba Group, Amazon, eBay, and JD.com.
b. Based on the net profit margin ratios of Alibaba Group, Amazon, eBay, and JD.com, determine which company is the most profitable and which is the least profitable. Provide possible explanations for these differences in profitability.
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