The Financial Statement Of Shell Plc

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.

This report will analyse and outline the company’s profitability, liquidity, solvency and investment potentials based on 15 ratios. All information is taken from the Next plc 2011 statement.

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

Shell is a global group of energy and petrochemical companies. Their operations are divided into four businesses, which are upstream, downstream, integrated gas, and projects and technology. Upstream focuses on exploration of new liquids and natural gas reserves. Integrated gas focuses on liquefying natural gas (LNG) and converting gas to liquids. The downstream division turns crude oil into a range of refined products, which are then moved and marketed around the world for use. Projects and technology is responsible for delivering new development projects (“What We Do”).

Financial performance measures, such as operating income and return on investment, indicate whether the company’s strategy

The gross profit margin is a critical indicator for a retailer and it is slightly increase to 30.38 % in 2012 from 29.27 % in 2011. The reason of increase is due to selling price and increase by 7%. This indicated Next plc is able to control its discounting strategy very well. The total mark down cost of next directory and retail is only 0.6 % of overall sales.

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.

Hint: Refer to the financial statements in the end of the document to calculate 2011 Cost of Revenue (also referred to as Cost of Sales and Cost of Goods Sold) for both Exxon and Shell. Note that Cost of Sales for an oil & gas company (mainly) consists of oil and gas purchases that match to current sales (i.e., it’s part of the income statement) and production and manufacturing expenses.

The Gross Margin ratio represents the percent of total sales revenue that TCI retains after incurring the direct costs associated with producing the goods and services sold by them. It helps us distinguish, as much as possible, between fixed and variable costs. With a 20%, 15%, or 10% projected increase in sales, for 1996, we calculated TCI’s GM ratio to be 41.85% , and in 1997 to be 41.84%. This means that around 42% of TCI’s sales dollar is available to pay for fixed costs, like its potential long-term debt to MidBank, and to add to profits.

In the Table __ and Fig __, you can see how the company has been performing. The overall profitability of the company has increased. Profitability ratios have increased since 2010. In particular, Harvey Norman’s Gross Profit Margin saw a significant growth, it grew 44.7% since 2010. Operating Profit Margin saw a similar result, finishing with a ratio of 10.5 in Financial Year 2015. Harvey Norman’s Net Profit Margin (when positive), have been at best maximum and are further illustrative of the paper-thin margins typically associated with the retail sector. Investments of Return on Assets (ROA) and Return on Equity (ROE) were also substantial, comparing 2010 and 2015 there was a relative decrease in ROA and ROE which doesn’t make much of a difference if the Gross Profit Margin has a strong game. Thus, on the basis of the financial results over the last 6 years, shareholders would definitely be confident about investing in Harvey Norman, unless there is a decline in current asset and equity returns.

Wayne thinks that the gross margin may shrink to 27.5 percent because of higher purchase prices. He is concerned about what impact this will have on borrowings. Because share prices move frequently, and company is exposed to the risk that the shares might fall in value. If margins decrease it a chance that they could possible impact them receiving loans. Being that there was an increase in sales there could mean a decline in customer or bringing in more customers.

By 2001, almost 50 years after its inception, Petrobras had become a fully integrated oil and gas company. Petrobras was the seventh largest publicly traded oil and gas company in the world based upon proven reserves, the largest Brazilian corporation, the third largest Latin American corporation, and the 185th largest global company, by 2001 consolidated revenues. In Brazil, Petrobras had a dominant position in both upstream and downstream activities. The company’s combined oil and gas production was 1,621 tbpd and it had proven reserves estimated at around 9.3 billion boe.5 (Exhibit 1 provides selected oil and gas data for Petrobras and other oil companies.) Most of the firm’s proven reserves were located in very deep waters (more than 400 meters) and Petrobras was the world’s pioneer in deep water oil exploration and production. Furthermore, with approximately

The Gross profit margin stays relatively constant at around 36 %. However, there is a slight rise from 2000 to 2004.

During this period, the Return on Assets increased from 5.7% in 2012 to 34.6% in 2013. This implies the number of cents earned on each dollar of assets increased from 2012 to 2013. This shows that the business has become more profitable. Equally, the Return on Equity also increased from 12.0% in 2012 to 46.5% in 2013. This similarly implies that the company in 2013 was more efficient in generating income from new investment. This, also can be attributed to the sale of the Digital Business Brand which enabled the company appraise its strategic plan.

Approximately 13.8% of the price differential in Europe for the Royal Dutch can be explained by market inefficiencies, and 11.71% for Shell in New York can be explained by the same reason.