This 10 page paper examines a case study provided by the student, undertaking a ratio analysis of the company’s performance and then looking at how they could fund an acquisition. The bibliography cites 1 source.
Name of Research Paper File: TS14_TErondo.rtf
Unformatted Sample Text from the Research Paper:
Examining these we can consider how the company is performing and the way this compares to former years as well as to the industry averages and best. In this case
we are looking at the Rondo Company, where the figures have been provided by the student. The first ratio the gross profit margin, this is expressed as a percentage.
This is the level of revenue that remains when all of the direct costs for producing the goods or services are deducted form the revenue. This indicates the level at
which direct costs account take up revenue. Table 1 Gross profit margin 2003 2004 2005 Sales (a) 41,250,000
46,250,000 50,000,000 Cost of Goods Sold (b) 28,875,000
32,375,000 35,000,000 Gross Profit (c) (a-b)
12,375,000 13,875,000 15,000,000 Gross profit margin (c/a x
100) 30.00% 30.00% 30.00% From this we can see there has been o change in the gross margin although the actual level of the profit has increased. However, we can
also see that this is a lower than average gross profit margin as the industry average is 35%, so the cost of goods may indicate some inefficiencies in the way
they are used. The next measure is the net profit margin. This net profit is a common ratio which is used by