Paper Topic:

FINANCIAL AND MANAGERIAL ACCOUNTING

Profitability of Nicosia Motors

The profitability ratios gross profit margin and net profit margin are displaying negative factors from 2010 to 2012 , with an improvement in the latter year . These ratios indicate the gross profit and net profit generated out of very 100 of sales (McKenzie 2003 ,

353 . By examining the income statement , the decline in such ratios from 2010 to 2012 is primarily due to the much higher increase in costs in proportion to sales revenue . This more applies to operating expenses . This is due to the fact that the

operating expenses to sales ratio trend are in line with the trend in gross profit and net profit margin . Such ratio indicates how much of every 100 of sales is consumed by operating expenses (Randall 1999 ,

465 . In 2013 positive trends are portrayed through a rise in the gross profit and net profit margin and a decline in the operating expenses to sales ratio . However these figures are still low . For instance the net profit margin is still at 2 .58 meaning that 2 .58 result as net profit from every 100 sales

The asset turnover , which outlines the managerial ability to generate sales out of the assets used rose steadily during the years , with the exception of a slight fall from 2010 to 2011 (Randall 1999 ,

467 This shows a good image of resource utilisation

The return on line with profitability ratios noted above , with the...

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