_net profit margin _ROCE More than 200 words thank you 12 Aa an | styles Text Bo
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_net profit margin _ROCE More than 200 words thank you 12 Aa an | styles Text Box |-)" Then Ratio 2016 (S) 2015 (S) Profitability Net Profit Margin 1,060,861 x10096 | 1,120,459 0,955766 100% = 2.66% = 2.63% 1,060,861 + 6208 9,073,098 +261.654 10,296,436 +280,170 1,120,459+ 9707 ROCE × 100% 10096 -12.05% = 11.45% (Figure 2.1) Profitability. Businesses come into being with the primary purpose of creating wealth for the owners. Profitability ratio provide an insight to the degree of success in the achieving thiExplanation / Answer
Net Profit Margin
Net profit margin (also called profit margin) is the most basic profitability ratio that measures the percentage of net income of an entity to its net sales. It represents the proportion of sales that is left over after all relevant expenses have been adjusted. Net profit margin measures how much of each dollar earned by the company is translated into profits. A low profit margin indicates a low margin of safety: higher risk that a decline in sales will erase profits and result in a net loss.
Net profit margin is an indicator of how efficient a company is and how well it controls its costs. The higher the margin is, the more effective the company is in converting revenue into actual profit.
Net profit margin is mostly used to compare company's results over time.
In this Case, net profit margin in 2016 is slightly higher than the year 2015. It interprets that the company is trying to control its cost in 2016 and more effectively translating its revenue into profit.
ROCE
Return on capital employed or ROCE is a profitability ratio that measures how efficiently a company can generate profits from its capital employed by comparing net operating profit to capital employed. a higher ratio would be more favorable because it means that more dollars of profits are generated by each dollar of capital employed. Investors are interested in the ratio to see how efficiently a company uses its capital employed as well as its long-term financing strategies.
In this case, ROCE in 2016 is higher than the year 2015. It shows that in 2016 the company generates more earnings per dollar of capital employed.
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