2012 AD-TO-SALES RATIOS AND GROSS MARGINS NOTES: Advertising Ratios Budgets are based on data from government filings and published financial records. Three accounting measures are reviewed: Advertising Expenditures, Net Sales and Cost of Goods sold SIC No= Standard Industrial Classification Number as established by the U.S. Department of Commerce. Ad Dollars as Percent of Sales= Advertising Expense Divided by Net sales(after returns, allowances, discounts) For practical purposes, Net Sales can be thought of as the"Top Line"of the company s income statement The ratio shown is an estimate for the current year based on forecasting models. It can be thought of as the"most likely"advertising-to sales ratio for the specified industry Ad Dollars as Percent of margin- Advertising Expense divided by Net sales Minus Cost of Goods Sold.(Includes production, labor, materials, and appropriate overhead; does not include non-production expenses, taxes, interest depreciation, amortization, selling general, and administrative expenses. For Non-Manufacturing companies, cost of goods sold represent total operating costs. The ratio shown is an estimate for the current year based on forecasting models. It can be thought of as the"most likely"advertising-to-gross margin ratio for the specified industry Annual Ad Growth Rate(%)and Annual Sales Growth Rate(%): Two growth rates are reported for each industry These growth rates are based on forecasted advertising spending and forecasted sales from the models applied to historical data. They are the average annual compound growth rate in advertising and in net sales expressed as a percentage, calculated over the current period, last year to next year In some instances, the growth rate of advertising and the growth rate of net sales will be the same. This event indicates that the Constant Ratio Model was mainly or entirely used to estimate advertising spending. Since this model uses forecasted sales to estimate advertising spending, the growth rates will b the same or similar. In this report, a zero value such as 0 or 0.0 are "legitimate"numeric values which indicate that spending for the year was under $1, 000. N/A is used to indicate missing data (ad spending not published or released; or the forecasting models were not able to derive estimates In the industry summary tables, where figures are composites of data values for the set of all firms in the industry, the difference between N/A and"zero"is important. In calculating industry summary figures, N/A values are omitted from the calculations while "zero"values are included Source: Schonfeld Associates- Advertising Ratios Budgets-July 20122012 AD-TO-SALES RATIOS AND GROSS MARGINS NOTES: Advertising Ratios & Budgets are based on data from government filings and published financial records. Three accounting measures are reviewed: Advertising Expenditures, Net Sales and Cost of Goods Sold. SIC No. = Standard Industrial Classification Number as established by the U.S. Department of Commerce. Ad Dollars as Percent of Sales = Advertising Expense Divided by Net Sales (after returns, allowances, discounts). For practical purposes, Net Sales can be thought of as the "Top Line" of the company's income statement. The ratio shown is an estimate for the current year based on forecastsing models. It can be thought of as the "most likely" advertising-to-sales ratio for the specified industry. Ad Dollars as Percent of Margin - Advertising Expense Divided by Net Sales Minus Cost of Goods Sold. (Includes production, labor, materials, and appropriate overhead; does not include non-production expenses, taxes, interest, depreciation, amortization, selling, general, and administrative expenses. For Non-Manufacturing companies, cost of goods sold represent total operating costs.) The ratio shown is an estimate for the current year based on forecasting models. It can be thought of as the "most likely" advertising-to-gross margin ratiio for the specified industry. Annual Ad Growth Rate (%) and Annual Sales Growth Rate (%): Two growth rates are reported for each industry. These growth rates are based on forecasted advertising spending and forecasted sales from the models applied to historical data. They are the average annual compound growth rate in advertising and in net sales expressed as a percentage, calculated over the current period, last year to next year. In some instances, the growth rate of advertising and the growth rate of net sales will be the same. This event indicates that the Constant Ratio Model was mainly or entirely used to estimate advertising spending. Since this model uses forecasted sales to estimate advertising spending, the growth rates will b the same or similar. In this report, a zero value such as 0 or 0.0 are "legitimate" numeric values which indicate that spending for the year was under $1,000. N/A is used to indicate missing data (ad spending not published or released; or the forecasting models were not able to derive estimates). In the industry summary tables, where figures are composites of data values for the set of all firms in the industry, the difference between N/A and "zero" is important. In calculating industry summary figures, N/A values are omitted from the calculations while "zero" values are included. Source: Schonfeld & Associates - Advertising Ratios & Budgets - July 2012