Persimmon Case Summary

The profit margin ratio demonstrates the ability of a company to increase the percentage of net income earned for every dollar of sales. For example: “this ratio shows the percentage of each sales dollar earned as net income”. (Harrison Jr., Horngen, Tomas, 2013) The Hershey Company was able to increase the profit margin ratio from 10 percent in 2012 to 11 percent in 2013. The increase in profit margin from the previous year 2012 shows that the performance of the company is increasing which means that revenue is increasing or expenses are decreasing. Furthermore, The Hershey Company is managing their performance efficiently and this is directly reflected in profit margin ratio.

Early Inklings is a pun, that is, a witty essay on words that suggest double meaning. Pun in this essay is the early childhood experience John faces, right from his childhood from swatting flies to becoming a summer copyboy. Early ideas or hints (inklings) that he had throughout all these jobs until he becomes a summer copyboy, whose job was related to ink and newspaper. Yes, this is an effective title. In this essay, John connects all his experiences right from age 6 as fly swatter until age 18 as summer copyboy until he finds his element (characteristics). He says in the last line “This is my element, my inkling”. This shows that to have a job satisfaction one needs to identify his own skills and his own personal interest based on his or her characteristics.

The Gross Profit rate has increased from a rate of 31.1% in 2 Feb 2003 to 31.8% in 1 Feb 2004. There has been a consistent improvement in this ratio for the past eight years. The following reasons are attributable to the GP rate increase:

When one contemplates the concept of eugenics, few think of modern contraception and abortion when in reality they are one in the same. The American Eugenics Society, founded in 1923, proudly proclaimed that men with incurable “conditions” should be sterilized. However these conditions were often none that could be helped, such as, one’s intelligence, race, and social class (Schweikart and Allen 529-532). The purpose of the society was to create the perfect class of men; elite in all ways. Likewise, Margaret Sanger’s feminist, contraceptive movement was not originally founded with this purpose. It was marketed as a way to control the population and be merciful to those yet to be born, again determined also by race and

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

Gross profit is defined as the difference between Sales and Cost of Sales. The gross margin (or gross profit ratio) expresses the gross profit as a proportion of net sales. The gross profit margin ratio measures how efficiently a company uses its resources, materials, and labour in the production process by showing the percentage of net sales remaining after subtracting the cost of making and selling a product or service. It indicates the profitability of a business before overhead costs. The higher the percentage, the more the business retains of each dollar of sales. So: the higher the gross profit margin ratio, the better.

The gross margin ratio is a shorter version of the return on sales ratio as it only contains Gross Profit and Sales. WoolEx Mills’ gross margin was 0.14, 0.15, and 0.15 for 2009, 2010, and 2011 respectively. The slight increase over the three-period represented the company’s difficulty to attract new customers and its expenses were not cost effective (Krishnan & Shah 2015) (Kokemuller

In 2009, the operating profit was 3.56% which was slightly above than the previous year. After deducting all the expenses, the left amount is the net profit and the proportion of net profit in respect to total revenue is the net profit margin. Sainsbury’s net profit margin for the years 2009, 2008 and 2007 were 1.53%, 1.84% and 1.89% respectively. The management thinks that the tough market condition and the other competitors with very cheap pricing have pushed them to squeeze their profit margin ratio. The graph below shows the Return on Capital Employed as well. The ROCE gives the idea about how much return a company is making on its used capital. (investorwords.com) The ROCE for the company was 9.46%, 7.10% and 7.59% for the years 2009, 2008 and 2007 respectively. The year 2009 proved to be a little bit more in context of return on capital employed.

During the period 2012 and 2013, the Operating profit margin decreased from 9.2% to 5.7%. This slight decline can be attributed to the decreased revenues and the increase in tax expenses.

Profit Margin: -This ratio relates the operating profit to the sales value (Walker, 2009). It tells us the amount of net profit per pound of turnover a business has earned.

The gross profit margin measures the amount of profits that a company generates from its operations without consideration of its indirect costs. Thehigher thegross profit margin, the greater the efficiency of a company’s operations (Besley & Brigham 2007). It means that the company is generating enough income to cover its operating expenses. On the contrary, a lower gross profit margin indicates that the business is not generating adequate income to cover its operating expenses.

Company B (88.9%) has a higher gross profit margin most likely because the firm not only manufactures and mass markets a broad line of prescription pharmaceuticals, over-the-counter remedies, consumer health and beauty products but also manufactures medical diagnostics and devices. Company A is lower (76.1%) due to its limited product range (only manufactures drugs).

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%).

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