Explain operating profit margin - performance ratios, Strategic Management

Assignment Help:

Q. Explain Operating profit margin - performance ratios?

Operating profit mar =              (PBIT / Turnover) x 100%

This is the ratio of operating profit to sales or turnover.  A high operating profit margin is due higher sales prices or low costs.  Other factors to consider include inventory valuation, overhead allocation, bulk discounts and sales mix. 

Low profit margins are not normally good news as it suggests poor performance.  But there may be other factors to consider relating to the business activities and industry.  For example the company may be entering a new market which requires low selling prices.


Related Discussions:- Explain operating profit margin - performance ratios

Show the quick ratio or acid test, Q. Show the Quick ratio or acid test? ...

Q. Show the Quick ratio or acid test? Quick ratio or acid test   Quick ratio = Current assets less inventories / Current liabilities               (times) This ratio meas

Lukas manufacturing , Lukas Manufacturing is presently producing a tape hol...

Lukas Manufacturing is presently producing a tape holder that has a variable cost of $0.75 per unit and a selling price of $2.00 per unit.  Fixed costs are $20,000 a year.  Present

What do you mean by inventory days, Q. What do you mean by Inventory days? ...

Q. What do you mean by Inventory days? (Average inventory / Cost of sales)     x      365 days Average inventory can be arrived by taking this year's and last year's invento

Developing corporate culture, propose a framework of organisational values ...

propose a framework of organisational values that meet the specific strategic and operational needs of an organisation

Describe the system development strategies, A customer has engaged your sof...

A customer has engaged your software development company to develop a new order-processing system. However, the time frames are very tight and inflexible for delivery of at least t

Evaluate the dividend yield, Q. Evaluate the Dividend yield? Creating ...

Q. Evaluate the Dividend yield? Creating shareholder value  Dividend yield Dividend yield     = (Dividend per share / Market share price) x 100% The dividend yiel

Maintaining the strategic plan, A good strategic plan is a dominant motivat...

A good strategic plan is a dominant motivator for change and usual progress updates are crucial to maintain that momentum. The next steps then are to regularly ensure in on progres

Strategy is currently developed in vrc company, VRC is a family owned busin...

VRC is a family owned business which has been manufacturing racing cycles for over a century. Over the years, the company has been relatively successful, although its growth has te

Stock control and depreciation, Write policy guidelines for Heads of Depart...

Write policy guidelines for Heads of Departments on: Cash Flow and Capital Investment Stock Control and Depreciation.

Synergy, Mergers and acquisitions (abbreviated M&A) are both an aspect of c...

Mergers and acquisitions (abbreviated M&A) are both an aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of di

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd