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Profitability Analysis

Autor:   •  September 2, 2011  •  Essay  •  4,135 Words (17 Pages)  •  1,821 Views

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Profitability Analysis

Gross Profit Margin compares an entity's gross profit to its sales revenue, reflecting the proportion of sales revenue that ends up as profit.

It is calculated by: Gross Profit x 100

Sales Revenue

2009 2008

30707 x 100

3634324

= 0.8 %

22532 x 100

5370244

= 0.4 %

China Aviation Oil:

2009 2008

82054 x 100

285129

= 28.8 %

111353 x 100

470940

= 23.6 %

Royal Dutch Shell:

We can determine that Shell's gross profits are significantly higher than China Aviation Oil's in both 2008 and 2009.

Profit Margin reveals what percentage of sales revenue dollars result in Earnings before Interest and Tax (EBIT).

It is calculated by: EBIT x 100

Sales Revenue

2009 2008

45199 x 100

3634324

= 1.2

...

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