"5.2 Gross Profit Margin RatioFigure 1: Revenue Source: Cargills (2015)In 2010, the firm gross profit margin was 3.44% while in 2012 the Cargills PLC gross profitmargin has increased to 6.12%. Further, in 2012 the firm revenue increment have increaseddrastically and the firm cost of sales also fallen in 2012, as a results firm gross profit margin hasbeen increased drastically. This percentage clearly indicates Cargills PLC operate their businessin an effective way. However, in 2014 gross profit margin of Cargills PLC has decreased,because firm revenue margin decreased (27%). Reduction in revenue would cause the firm grossprofit margin and performance as well. Therefore, in future, Cargills PLC management shouldcut down the cost of sales in order to increase the gross profit margin cost. Hence, the CargillsPLC might make a bulk purchase from their suppliers, which would help them to decrease thecost because it offers a discount price. Moreover, the firm might increase selling price, whichwould assist them to increase their revenue and gross profit margin as well. Page | 6 5.3 Total Asset Turnover and Return on Capital EmployedFigure 4: Total AssetsSource: Cargills Annual Report 2015In 2012, the firm total assets turnover increased to 1.94, in 2010, it was 1.56 times. However, in2014, the total assets turnover has slightly decreased (1.18 times). Cargills PLC total assetsturnover ratios indicate the firm need more days to generate profit from their total assets, whichmeans the firm operates the business in an ineffective way. In addition, examines the firm returnon capital employed (ROCE) ratio during the financial year 2010, 2012 and 2014, the authorfinds out the ROCE ratio increased rapidly (6.98% to 2.21%). This percentage value clearlyshows Cargills PLC run their business in an effective manner in 2012. In contrast, the firmROCE ratio decreased significantly during the year 2014, in this year ROCE of firm is only8.64%. Reduction in return capital employed indicates performance of Cargills PLC is poor in2014. Further, firm inventory turnover ratio also decreased. As a result, the Cagills PLCmanagement should utilise their resources in efficient manners, which would help the firm toperform well in the competitive marketplace. Furthermore, the firm might utilise suitableinventory management method, which would assist the firm to enhance the performance. Page | 7 5.4 Gearing RatioAnalysis the gearing ratio of Cargills PLC, the firm had a zero percentage (0%) of gearing ratioduring the years 2010 and 2012. However, in 2014, Cargills PLC hold 12.62% gearing ratio.Organisations likes Cargills should hold a little percentage of gearing ratio in order to performwell. Further, maintain a smaller percentage of gearing ratio might assist the firm to operate theirbusiness in an effective way. Nevertheless, the firm should understand about borrowing, becausemore borrowing should influence performance of firm and it would affect the firm brand image.Moreover, negative perception among customers will impact.5.5 Current RatioIn the meantime, Cargills PLC current ratio slightly increased during the year 2012, it was 0.45in 2010 while in 2012 it is 0.64. However, current ratio decreased to 0.64 to 0.47 in 2014financial year. Recent current ratio numbers shows the firm does not hold sufficient currentassets to settle current liabilities. Therefore, the firm future management should think about thebank over draft, which could increase the cost of financial because of expenditures.5.6 Payable daysExamination on the Cargills PLC payable days for the year 2010 and 2012, the firm payable daysreduced drastically. In 2010 firm payable days was 75days but in 2012, it was 49 days. Thisclearly suggests the firm settle their liabilities on time. Further, early settlement to the creditors isbeneficial for the firm, because it would increase the reputation of the firm between consumers,suppliers/creditors. Similarly, the trade payable days decreased even further in 2014 (7days). In2014, the firm need only 7 days to pay their liabilities to their creditors. Moreover, decrement inthe payable days indicates firm would maintain better relationship with their creditors/suppliers.Additionally, it would support the firm to buy more resources or materials in credit base from thesuppliers/creditors.On the other hand, decrement in payable days would have adverse impact onthe firm working capital. Page | 8 "