It’s important for you to keep a track of how much revenue your company is generating when compared to the effort, time, and expenses that are being invested into the production. The following table will give you an accurate description of your company’s profit.
Fill up this table with the data needed −
(The “Details needed” column will tell you the source of the information)
|
Metric |
Details needed |
This Year |
Last Year |
2 Years |
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Gross Profit Margin (Gross Profit / Revenues) × 100 |
Income |
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Operating Profit Margin (Operating Profit / Revenues) × 100 |
Income |
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Net Profit Margin (Net Profit / Revenues) × 100 |
Income |
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Profit Margin |
Income |
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Diluted Earnings Per Share |
Income |
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Operating Ratio (SG&A / Total Revenues) × 100 |
Income |
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Benefit Ratio (Payers) (Benefits Paid / Premiums) × 100 |
Income |
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Other Cost (if any) mentioned as %age of Sales |
Income |
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Based on the information collected above, answer the following questions:
● Are the goods and services provided by your company unique? If so, does it result in a high margin of profit or low? What elements contribute to the profit margins of your company?
● Identify the trends in the Profit metrics.
● What does your company share with the public about its sales, volume, cost management, and economies of scale?
● Identify all major costs and items that impact the profit of your company, after going through the Income Statement. How do they influence the company’s strategy and current challenges?
● Compare your company’s performance with its strongest competitor’s performance with respect to profit.
● Keeping in mind the company’s current cash situation, which products and services, according to you would give it the maximum advantage?