Case Study: Net Profit Margin: Kawan Food Berhad.

• Net profit margin has been negative and no major patterns over the 9 year period on net profit since the trend of the industry is based mostly on economic factors, and whether or not they secure contracts. Due to high percentage of COGS they are only left with a net profit of $980 or

Net Margin is the ratio of net profits to revenues of a company. It is used as an indicator of a company’s ability to control its costs and how much profit it makes for every dollar of revenue it generates. Net Margin is calculated using the formula: Net Margin = (Net Profit / Revenues ) * 100 Net margins vary from company to company with individual industries having typically expected ranges given similar constraints within the industry. For example, a retail company might be expected to have low net margins while a technology company could generate margins of 15-20% or more. Companies that increase their net margins over time generally see their share price rise over time as well as the company is increasing the rate at which it turns dollars earned into profits.

The gross profit ratio indicates that Next plc was able to maintain their gross profit. It has decreased insignificantly by 0.05%. In 2011

A typical Gross profit margin depending on the industry may be 25 to 30%. Nucor’s Gross profit margin ratio indicates that industry is intense and cost of goods is one of the main of factor in profitability. After examining the five year

The current ratio measures the company’s ability to pay its short term obligations with its short term assets. Between Coca Cola and PepsiCo, PepsiCo has a higher current ratio implying that is more capable of paying its obligations. The debt management policies of Coca-Cola in conjunction with share repurchase program and investment activity resulted in current liabilities exceeding current assets. From the ratio Pepsi Co suddenly had to pay all its short-term

The current cash debt ratio only measures the ability of a firm 's cash, along with investments easily converted into cash, to pay its short-term obligations. In 2007, the company has a current cash debt ratio greater than 1 and is in better financial shape than in 2006, when the ratio was less than 1.

Profit margin ratio is the ratio between net income and net sale. This ratio discloses the earning capacity of the business. Higher profit margin ratio ensures high return to the owner or shareholders. It also helps in the growth of the business. Profit margin ratio of Peyton Approved is 53.44%, which is excellent and shows that company is has a good prospects in terms of

This measures the relationship between net profits and sales of a firm. The net profit margin is indicative of management’s ability to operate the business with sufficient success not only to recover revenues of the period, the cost of merchandise or services, the expenses of operating the business and the cost of the borrowed funds, but also leave a margin of reasonable

The profitability ratios used to assess CanGo’s profitability are net profit margin, operating profit margin and return on assets. All these measures appear to be positive which provides good news for investors as well as management. Net profit margin indicates whether a company has been successfully controlling its costs or not. If net profit margin is high it demonstrates that a company has effectively converted sales into profit. This ratio can be compared with other firms in the industry. A high net profit margin provides competitive edge to a company which is required if it wishes to expand its scale of operation.

Increase in current liabilities Substantial increase in current liabilities weakened the company’s liquidity position. Its current liabilities were US$2,063.94 million at the end of FY2010, a 48.09% increase compared to the previous year. However, its current assets recorded a marginal increase of 25.07% - from US$1,770.02 million at the end of FY2009 to US$2,213.72 million at the end of FY2010. Following this, the company’s current ratio declined from 1.27 at the end of the FY2009 to 1.07 at the end of FY2010. A lower current ratio indicates that the company is in a weak financial position, and it may find it difficult to meet its day-to-day obligations.

According to the comprehensive income statements of Blackmores, the figures of net profit margin of the three years

| The company generates 8.83 cents in net income for every $1 sales, quite good for a low profit margin business.

Operating profit margin figures in the table above show the return from net sales[13]. However profit margin ratios are high enough for the 3 years, there is a fall from 12.86% to 11.26% during 2011-12. Sales revenue increases with a higher rate than gross profit so there is a poor

The decrease shows a prudent position particularly in when the world is undergoing economic recession; Rio Tinto Ltd reduced its reliance on debt to finance its assets. This also explained the 22% increase in current portion of long term debt, i.e. the company retired major portion of its debt holdings in the last year.

In 2017, the firm had a higher percentage of cost of sales in term of revenue than 2016, the cost of sales was 30.11% which was higher than 2016 for 0.21%, that means the firm’s gross margin in 2017 (69.89%) will also lower than the gross margin in 2016 for 0.21%. Burberry had a higher net operating expenses in 2017. The net operating expenses was 55.63% which was higher than 2016 for 1.56%, that also lower the operating margin, therefore the operating margin for the firm has decreased from 16.02% to 14.26% (-1.76%).