Corporate Valuation
Autor: Salah Laziz • May 17, 2017 • Course Note • 544 Words (3 Pages) • 628 Views
Profitability ratios | Numinator | Denominator | 2014 2015 2016 |
ROE | Net income | Average equity | 44,7% 50,79% 44,64% |
Net profit margin | Net income | Revenue | 3,65% 5,37% 7,38% |
Gross profit margin | Gross profit | Revenue | 36,39% 38,65% 41,57% |
Operating profit margin | Operating profit | Revenue | 5,78% 7,56% 7,57% |
Pretax profit margin | Pretax profit | Revenue | 4,67% 7,05% 9,65% |
If we analyse the Net profit margin of the company Sofa from 2014 to 2016 we notice an important increase of 3,73 % which shows that the net income of the company increased in the last few years in comparison with it’s revenue . Why did the net profit margin of the company increase ? What are the causes ? Can Sofa improve it more drastically ?
Concerning the Gross Profit margin there is an important development in the percentage slop of it .It’s mainly a 5,22% increase the last three years .The Sofa company has a good control over the costs of the goods sold which makes it able to benefice from a positive gross profit margin . What about tomorrow? Can the company assure a sustainable development? Does she have a good plan to do it ?
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