Gross Profit Margin Analysis

Gross Profit Margin The Gross Profit Margin is used to measure the proportion of the gross profit to sales in order to determine the allocated amount for the operating expenses of the company. The Gross Profit of the Jolliville Holdings Corporation improved in the year 2015 and has declined a little in the year 2016 due to the decrease in Sales, specifically power and equity share in net earnings of associates. But still, Gross Profit Margin for the year 2016 is still a good indication of profitability because they still have 40.58% of gross profit to pay for their expenses and also a huge difference from the year 2014. From 2014, the gross profit margin increased by almost 5% because the cost of sales decreased due to the huge savings in the portion of fuel. They already have a contractor which they can have discounts.
Operating Margin The Operating Margin indicates the portion of the operating income from its sales. In the calculations above, from 2014 to 2015 the operating margin increased and declines in 2016 by almost 1%. Jolliville’s operating margin declines because the operating income decreases. The decrease is due to the increase of operating expenses. The increase of operating expense is because of the increase in impairment loss and salaries.
Net Profit Margin
The net profit margin reveals the amount of profit that can be extracted
The return on assets ratio measures how effectively Jolliville Holdings Corporation can earn a return on its investment in assets. Based from the calculations above, it can be realized that for every peso amount JOH invested in assets during the year produced only 8.04 cents of net income. And for three years, from 6% to 8% ROA of Jolliville is a huge progress for the company and an appealing scene for the investors to invest. The increase in ROA indicates an upward profit trend as well as shown in the net profit