Description
Instructions Complete a ratio analysis on the company for three years. Include the ratio, its results and what the results mean for the company. Were there changes in the ratios, what could have caused the change?
Years 2014,2015 and 2016
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Explanation & Answer
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Surname 1
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Date
Ratio analysis
Net profit margin- it a profitability ratio that determines the amount of income earned
from every dollar of sale. It is calculated as follows;
𝑃𝑟𝑜𝑓𝑖𝑡 𝑚𝑎𝑟𝑔𝑖𝑛 =
𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
𝑇𝑜𝑡𝑎𝑙 𝑠𝑎𝑙𝑒𝑠
Applying the formula we obtain;
FY 2016
FY 2015
FY 2014
233,715,000 182,795,000
Total revenue
Net income
Profit margin ratio
$215,639,000.00
$ 45,687,000.00
0.212
53,394,000...
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