As a senior investment analyst, you have been analysing financial results of Cretail Ltd for the last few years.

The following table comprises a summary of the financial results for Cretail Ltd.

CRETAIL LTD 2022 2021 2020 Income statement Sales 34 212.0 33 018.0 32 266.8 Other income 91.8 71.9 0.0 COGS (26 160.8) (25 305.3) (24 059.5)

Gross profit 8 143.0 7 784.6 8 207.3 EBIT 850.9 1 027.2 888.1 Interest expense (98.9) (55.2) (13.5)

NPBT 752.0 972.0 874.6 Tax expense (215.6) (285.9) (258.1)

NPAT continuing operations 536.4 686.1 616.5 Profit from discontinued operations 627.2 (48.2) 0.0 NPAT attributable to shareholders 1 163.6 637.9 616.5 Pro forma NPAT 786.6 692.0 576.0 Sales growth 3.62% 2.33% 19.43%

Gross profit growth 4.60% 25.15% 10.94%
Gross margin 23.53% 23.36% 25.44%
Net profit margin 1.57% 2.08% 1.91%
DuPont analysis Net profit margin 1.57% 2.08% 1.91%
Asset turnover 3.75 times 3.58 times 3.57 times Leverage 2.54 times 2.70 times 2.21 times ROE 14.91% 20.09% 15.10%
1 Comment on the sales growth of Cretail Ltd for the last three years. Discuss any issues of concern.
2 Consider the gross profit growth and gross margin for Cretail Ltd in 2021. Discuss any issues of concern.
3 If you were part of the Cretail management in 2022 facing a takeover offer, how would you persuade shareholders to reject the takeover offer and continue to give you – the management – the chance to improve the company’s performance? You may wish to refer to the DuPont analysis in your answer.