Higher Value Equates to Higher Profit Essay

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A higher value of return on equity employed indicates the company is able to generate a higher profitability while lower value shows that the company is generating a lesser earning and lower profitability.
Therefore, from the bar chart we know that HupSeng is able to generate high profitability then other two companies with have highest value of return on capital employed, 28.03% compare to other two companies. For Hwa Tai, who have -2.86% on return on capital employed, it show that Hwa Tai was generating a loss in business and lowest profitability compare to other two companies. For London Biscuits which have 7.30% in return on capital employed, it means that London biscuits able to generate earning but less than HupSeng and have higher …show more content…

Compare & Comment From the bar chart shown above, the highest gross profit margin is HupSeng, with 35.47% compare to other two companies and the lowest gross profit margin is London Biscuits,with 25.40%. Hwa Tai gross profit margin is just more than London Biscuits about 0.10%, so it gross profit margin value was 25.50%.
Gross profit margin is able to reveal the financial health of a certain company. Low margin shows that the company unable to cope with the cost of production whereas high margin indicate that the company is in a good financial health as well as showing that the company is efficient in manufacturing and distributing processes.
For the bar chart shown that HupSeng is gaining RM35.47 gross profit of every RM100 of sales revenue generated before the operating expenses. It more than Hwa Tai London Biscuit about RM9.97 and RM10.07 gross profit of every RM100 of sales revenue generated before the operating expenses. In conclusion,HupSengperform better than other two companies.

Net Profit Margin
Net Profit Margin can be call profit margin or return on revenue or rate of profitability. Net profit margin is the rate of profitability which can inform us that the amount of after-tax profit which make for everyone dollar and it generate revenue. (Kennon, 2013) Net profit margin is very beneficial when companies which in the same industry.(Peavler, 2013)
Net Profit

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