London Biscuit Financial Analysis

) Investor’s perspective: Profitably Ratio & Market Ratio

Profit Margin is a ratio that measures how much income is kept in a company as compared to the total revenue. To simply put, it is a measure of profitability. To find out how much of every Ringgit of revenue is kept in the form of profit, a firm calculates its net profit by subtracting all of its expenses including interest and tax and divides that number by total revenue. Let’s compare Apollo’s, Oriental Food and London Biscuits gross profit margin. As we can see based on graph above, Apollo and Oriental Food has the same amount of gross profit margin which is 29% where else for London Biscuit, the gross profit is only 24%. This means that 29% and 24% of every Ringgit of

As compared to the previous year, the gross profit margin has decreased for these 3 companies. For the year 2012, London Biscuit Bhd has the better profit margin meaning this company keeps more money from every Ringgit and sales. In any case, diminishing the gross net revenue incidentally might be helpful over the long haul. A business might diminish its gross overall revenue by bringing down the expense of the products it offers or by utilizing higher quality, and in this way more costly, materials to make the merchandise. Higher quality products hold clients, which additionally can bring net revenues up later on. The net profit margin for Apollo Bhd and Oriental Bhd has increased by 1% and for London Biscuit; it has decreased by 2%. One of the essential elements that add to the adjustment in net overall revenue is an expansion or reduction of the cost of the sold units. Inventory is another factor that contributes to the change in the increase and decrease of net profit margin. The earnings per share for Apollo Bhd and Oriental Bhd have increased from 2011-2012 where else it have decreased for London Biscuit Bhd. Both the company’s EPS have increased if the net profit of the company increases. But it may not true always. Earnings per share can increase even if the profit remains flat or even goes

This shows that their profit margin has improved as compared to 2013. The net profit margin has increased for Apollo Bhd and Oriental Bhd where else it remains the same for London Biscuit Bhd. The earnings per share have increased for all these 3 companies. The ROA for Apollo Bhd remained constant from 2013 to 2014 where else it has increased for the other 2 companies. The ROE remains the same for all the 3 companies from 2013 to 2014. In conclusion, it can be stated that Apollo Bhd has the best profitability ratio compared to Oriental Food Bhd and London Biscuit Bhd. Apollo Bhd makes more profits. Since the company is generating more revenues, the profits also increase year by year. This also indicates that there are consistency or positive trends in Apollo Bhd company’s earnings. The positive profit may translate into a positive investment quality for this