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Is it good if a company's annual sales go up while the gross profit margin goes down and the net profit figures go down also what does this mean for the company?
Wiki User
∙ 10y ago
If company sales are increasing but gross profit as well as net profit is declining, it means that sales are not increasing as rapidly as company costs and expenses are increasing.
A thorough review should be conducted to analysis the situation and selling price should be adjusted according to increase in cost prices.
Wiki User
∙ 10y ago
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A company has an ROA of 10 percent a 2 percent profit margin and a return on equity equal to 15 percent. What is the companys total asset turnover and what is the firm's equity multiplier?
Given: ROA = 10%, Profit margin = 2%, ROE = 15% ROA = Profit margin x Asset Turnover Therefore, Asset Turnover = ROA / Profit margin = 10 / 2 = 5% ROE = Profit margin x Asset Turnover x Equity multiplier 15 = 2 x 5 x Equity Multiplier 15 / 10 = Equity Multiplier Equity Multiplier = 1.05
operating margin?
operating margin shows the operating income earned by a company. higher margin implies higher revenue earned. operating margin is calculated using the following formula:operating margin = (Operating income / Revenue) x 100
What is meant by a EBITDA margin?
A EBITDA margin is a way for companies to measure their profitability. This margin is equal to their earnings before interest, depreciation, tax, and amortization divided by the total revenue of the company. It is important to note that an EBITDA margin doesn't take into amortization and depreciation and therefore an investor who is interested in the company is able have a cleaner view of the main profits of the company (profits that are not influenced by depreciation and amortization). Essentially, the higher a EBITDA margin is, the less operating costs the company must pay, and therefore more overall profitability in its operation.
Profit in a sentence?
I am trying to expand the company's profit margin.
How is CM ratio useful in planning business operations?
The contribution margin ratio is the percentage of a company's contribution margin to its net sales
What factors can influence the selection of an appropriate discount rate for a multinational company?
Never to overlook the "ShareHOLDRES" . Never to forget ever that companys "PROFIT MARGIN " NEVER FALL" Answer: Profit comes forst . If you are well -in with "Establishment" perhaps youncan infkuence them for subsidy and then probably consider discount. " How you increase your "Market Share" "Market Intellegience"
Weighted-average contribution margin?
Weighted average contribution margin is the weighted amount of contribution margin generated by all units of different mix of products to recover the total fixed cost of company.
What is the formula for Operating Margin?
Operating Margin is a measurement of what proportion of a company's revenue is left over, before taxes and other indirect costs are incurred, after paying for variable costs of production like wages, raw materials etc.A good operating margin is required for a company to be able to pay for its fixed costs like interest on its debt. A higher operating margin means that the company has less financial risk.Formula:Operating Margin = (Operating Income / Revenue)Operating income is the difference between operating revenues and operating expenses
Can a profit margin ratio be negative?
A profit margin can be negative if the company had a negative net income. For eample if the company had $100,000 in net sales, but their net income was ($10,000) then (10,000)/100,000 = (10%) or negative 10%.
How to maintain company's return on shareholder's equity with a decline in a net profit margin?
increase the company's total assets.
Ginger Company's product has a contribution margin per unit of 11.25 and a contribution margin ratio of 22.5 percent What is the selling price of the product?
50
When a scientist is making a measurement what information must be included with the number?
The measurement units and the degree of precision (significant figures or margin of error).
