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

Limitations of using balanced scorecard, Q. Limitations of using balanced s...

Q. Limitations of using balanced scorecard? - Historical performance analysis is no guide to the future. - Manipulation or 'massaging' of performance measures by management,

Describe the key characteristics of a role culture, S Company has for many ...

S Company has for many years been a long standing household name, designing and manufacturing electrical appliances for use in the kitchen. It has developed a strong culture over t

Procedural history - sample case briefing, Procedural History: The pl...

Procedural History: The plaintiff filed an action for negligence under Texas law  and  the trial  court granted summary judgment in favor of the defendants.  All you are d

Free cash flows, Free cash flows can be arrived at by using the following c...

Free cash flows can be arrived at by using the following calculation Operating profit before interest and tax (PBIT) +                                              Depreciati

ReStrategic, Process design strategy define with example

Process design strategy define with example

Impact of environmental factors, Political Factors Political stability o...

Political Factors Political stability of parties and their actions like granting etc might also influence the business expansion plans of Bread Talk up to lesser extent in Singa

Diversification, refer to case scenario,is ICP''s focuse low-cost/price str...

refer to case scenario,is ICP''s focuse low-cost/price strategy opproprate for its industy?why?

Professional strategies to increase personal networking, Cham Stores is one...

Cham Stores is one of the biggest private sector employer in the Syria. The company has more than 2000 employees in Syria, Emirates and London. In Syria, Cham Stores range from sma

Managing value based management, Q. Managing value based management? ...

Q. Managing value based management? Strategic selection of projects that create high shareholder wealth. Resource allocation and funding should have a recognised oppor

Benefits of shared service centres, Q. Benefits of shared service centres ?...

Q. Benefits of shared service centres ? ¸ Economies of scale e.g. sharing overhead of a centralised function or process across divisions in the same group, it avoids divisions

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