Accounting

803 Words Dec 22nd, 2012 4 Pages
Major Monitor Ltd. Vs Key Keyboard Inc.

1. Major Monitor Ltd (MML) has higher gross profit margin of 34.7% ($7,080,000/$20,400,000). For every sales dollar, they are able to use 34.7 cents in the business and their COGS is 65.3 cents per sales dollar. Key Keyboard Inc.’s (KKI) gross profit margin is 31.1%. ($7,669,000/$24,650,000) They are able to use 31.1 cents in the business and the COGS is 68.9 cents, however as they have larger revenues, they can still thrive and be successful. MML has a net profit margin of 5.1%. ($1,040,000/$20,400,000) and KKI has a net profit margin of 4.5% ($1,100,000/$24,650,000). Major Monitor is able to make a larger net profit because their cost of goods sold is less. KKI has an Offer Acceptance
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Turnover Rate:

KKI: 20/262 = 7.6% MML: 34/217 = 15.7%

7. I would prefer to work for Key Keyboard Inc. Although the Gross and Net profit margins are lower than those of Major Monitor Ltd, the HR metrics are better. The turnover is lower, the job acceptance rate is higher and the cost per employee is less. The environment in which to work in seems like a much more appealing one. With engaged managers and employees, they can look at different ways that they can reduce their costs to make higher profit margins.

8. HR Recommendations: - MML needs to look at the reasons for why people are leaving the company. Even though their gross profit margin is higher, it seems to be at the cost of having happy, engaged employees as their turnover rate is much higher. - KKI needs to look at the costs of producing their products. They are making higher gross revenues, however relative to their net income, the cost of making the product (ie. Raw materials, supplies) is much higher than that of MML, which is eating into their Gross and net profits, which could allow for them to make more profit. - MML needs to have a look at their recruitment process. With their acceptance rate being so low, they need to ensure that they are pursuing the right candidates and making sure that the terms and conditions of the employment contract are within both the employer and employee’s specifications. - KKI

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