Question
Just give a general response or observation to this in a few paragraphs. For this exercise, I calculated financial ratios for my company, Snap-on Incorporated.
Just give a general response or observation to this in a few paragraphs.
For this exercise, I calculated financial ratios for my company, Snap-on Incorporated. I calculated the last five years of four different financial ratios so that I could view a trend.
2018 | 2017 | 2016 | 2015 | 2014 | |
Gross Margin | 49.9907 | 49.524 | 49.8601 | 49.1619 | 48.3357 |
Operating Margin | 25.5594 | 23.9253 | 25.102 | 22.8108 | 20.8897 |
Net Profit Margin | 18.1757 | 15.1265 | 15.9282 | 14.2776 | 12.8718 |
ROI - Return on Investment | 17.1284 | 15.3574 | 16.7345 | 14.901 | 13.9929 |
The trend of gross margin remains relatively stable over the five-year span, and remains pretty high at just under 50%. The operating margin is a measure of profitability and has increased about 22% over the last five years. The net profit margin reflects how much net income a business makes from each dollar of sales, and has increased substantially by 40% over the last five years. The ROI calculates the profits of an investment of the original cost, and has increased by just under 25%. Overall, these financial ratios tell me that Snap-on is a profitable company. The profit margin is pretty good, and the company has made positive investments which have increased profits and operating income.
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