Final answer:
The statement is true; ROS and ROI are marketing profitability ratios used by businesses to gauge marketing efficiency, relating marketing costs to profits generated.
Step-by-step explanation:
True, marketing return on sales (ROS) and marketing return on investment (ROI) are indeed marketing profitability ratios that businesses use to evaluate their marketing efficiency. These ratios help businesses determine how effectively they are turning their marketing expenses into profits. The ROS metric measures profitability by dividing the operating profit by net sales, providing insights into how much profit a company makes on each dollar of sales after accounting for the costs of goods sold and marketing expenses. Meanwhile, ROI focuses on the return relative to the investment in marketing, measuring the effectiveness of marketing campaigns in generating income compared to the cost invested in those marketing activities.
Both ratios rely on the fundamental profit equation, where Profit = Total Revenue - Total Cost. The effectiveness of these ratios stems from their ability to relate the specific activity of marketing to the overall profitability of the company. They are akin to the concept of EROEI (Energy Returned on Energy Invested) where a ratio provides a measure of how much is gained in comparison to what is expended, but in the context of marketing, the return is financial rather than energetic.