Profitability Ratios
Gross Profit
20102009
Fantastic Holdings Ltd45.7%44.9%
Nick Scali Ltd 62.7%58.1%
Indicates an entitys ability to maintain an adequate selling price higher up its costs. (Carlon et al 2009/2010, p.829)
Evaluation
NSLs higher gross profit balance indicates it has a better ability to maintain selling prices at an adequate level above costs to achieve advantageousness.
run Expense Ratio
20102009
Fantastic Holdings Ltd 40.6%39.2%
Nick Scali Ltd46.8%49.9%
This is the other ratio that like a shot affects profit margin; it is costs incurred to support distributively clam of sales. (Carlon et al 2009, p.830)
Evaluation
NSL spends more per dollar of sales on run expenses than FHL. NSL offers a grant product and incurs costs involved to gravel the business as such. These include high quality marketing campaigns, and staff with more training who are offered sales incentives.
exchange Return on Revenue
20102009
Fantastic Holdings Ltd 0.050.06
Nick Scali Ltd 0.200.13
The profit generated by each dollar of sales (Carlon et al 2009, p.839)
Evaluation
The slight fall down for FHL can be attributed to the increase in cash payments to suppliers and employees from 2009 to 2010.
NSL motto an improvement in their cash return on revenue resulting from the increase in the receipts from customers being greater than the change magnitude revenue from sales of goods.
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Return On Assets (ROA)
20102009
Fantastic Holdings Ltd 16 cents21 cents
Nick Scali Ltd 42 cents21 cents
The overall profitability of assets in terms of the rate earned on each dollar invested in assets. (Carlon et al 2009, p.828).
Evaluation
This ratio is an indicator of prudences effectiveness in generating profits. This shows that Nick Scalis sales strategy of positioning their product as a premium product and charging a premium is more effective that FHLs positioning as a budget...If you want to get a full essay, order it on our website: Ordercustompaper.com
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