Profitable Ratio Analysis of Thorntons Plc
Profitablity Ratio Analysis
This analysis ratio based on FAME report and annual report of Thortons (PLC) from 2007 to 2010. 1. Gross Profit Margin
During period 2007-2010, Thorntons was achieved the highest gross profit margin in 2007. It was increased the sales/revenue 5.3% (from ₤ 176.60m to 186.00 m). In 2008 the sales was increased 11.9% (from ₤ 186.00m to 208.12 m) however the gross profit margin was decreased due to the high cost of good sales compare to previous year which was increased 19.7%. In financial report 2009, the gross profit was declined from 105.105 m to 104.969m and declined of gross profit margin from 50.5% to 48.87$. In 2010, there was increased in gross profit margin though the sales was decreased from the previous year.
In terms of performance against its competitors in similar industry, the performance of Thortons is relatively higher during period 2007-2010 (Figure.1). The performance of other competitors, Dunhills, only could achieve the 42.16% in 2010. Compare to its competitors , it was indicated that Thorntons has high gross profit margin, meaning that Thortons has high production efficiency. Having High gross profit margin, Thorntons could pay its operating expense, tax , employee benefits etc. 2. Operating Profit Margin
In view of its Operating Profit Margin, Thorntons performance was increased in two consecutive years from 2007 to 2008 with ratio 3.81 % and 4.03%. This increase in operating margin was followed by declining in two consecutive years 2009 and 2010 with ratio 3.77% and 2.86%. These declined of operating profit margin due to increased in the expenses, especially in employee benefit and inventories expenses which continuously rose from 2007 to 2010. In addition the strategy of company to introduce many new products, increased our multi-channel offer and invested significant sums in new point of sale systems and factory automation has increased the cost. Furthermore the economic
This analysis ratio based on FAME report and annual report of Thortons (PLC) from 2007 to 2010. 1. Gross Profit Margin
During period 2007-2010, Thorntons was achieved the highest gross profit margin in 2007. It was increased the sales/revenue 5.3% (from ₤ 176.60m to 186.00 m). In 2008 the sales was increased 11.9% (from ₤ 186.00m to 208.12 m) however the gross profit margin was decreased due to the high cost of good sales compare to previous year which was increased 19.7%. In financial report 2009, the gross profit was declined from 105.105 m to 104.969m and declined of gross profit margin from 50.5% to 48.87$. In 2010, there was increased in gross profit margin though the sales was decreased from the previous year.
In terms of performance against its competitors in similar industry, the performance of Thortons is relatively higher during period 2007-2010 (Figure.1). The performance of other competitors, Dunhills, only could achieve the 42.16% in 2010. Compare to its competitors , it was indicated that Thorntons has high gross profit margin, meaning that Thortons has high production efficiency. Having High gross profit margin, Thorntons could pay its operating expense, tax , employee benefits etc. 2. Operating Profit Margin
In view of its Operating Profit Margin, Thorntons performance was increased in two consecutive years from 2007 to 2008 with ratio 3.81 % and 4.03%. This increase in operating margin was followed by declining in two consecutive years 2009 and 2010 with ratio 3.77% and 2.86%. These declined of operating profit margin due to increased in the expenses, especially in employee benefit and inventories expenses which continuously rose from 2007 to 2010. In addition the strategy of company to introduce many new products, increased our multi-channel offer and invested significant sums in new point of sale systems and factory automation has increased the cost. Furthermore the economic