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Problem The manager of the company X would like to check the evolution of Profit rate for 2 successive months. In order to adopt concrete improvement solutions, he wants to know: Exactly how much the profit rate changed during the 2 successive months The manager wants to know the exact causes of this change and the extent to which they have led to declining profit ratio More exactly he wants to know how and what are the influences of revenues, expenses and turnover on the change of this ratio Rp-Profit/Turnover *100 = (Revenues-Expenses)/Turnover *100 Revenues: R1=10,000 lei, R0= 11,000 lei

Problem The manager of the company X would like to check the evolution of Profit rate for 2 successive months. In order to adopt concrete improvement solutions, he wants to know: Exactly how much the profit rate changed during the 2 successive months The manager wants to know the exact causes of this change and the extent to which they have led to declining profit ratio More exactly he wants to know how and what are the influences of revenues, expenses and turnover on the change of this ratio Rp-Profit/Turnover *100 = (Revenues-Expenses)/Turnover *100 Revenues: R1=10,000 lei, R0= 11,000 lei

Corporate Fin Focused Approach
Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter3: Analysis Of Financial Statements
Section: Chapter Questions
Problem 15SP
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Problem The manager of the company X would like to check the evolution of Profit rate for 2 successive months. In order to adopt concrete improvement solutions, he wants to know: Exactly how much the profit rate changed during the 2 successive months The manager wants to know the exact causes of this change and the extent to which they have led to declining profit ratio More exactly he wants to know how and what are the influences of revenues, expenses and turnover on the change of this ratio Rp=Profit / Turnover *100 = (Revenues-Expenses)/Turnover *100 Revenues: R1=10,000 lei, R0= 11,000 lei Expenses: El= 8,000 lei, E0= 7,000 lei Turnover: T1= 6,000 lei , TO =5000 lei Profit ratio: Rp1=33% Rp0=80%
Transcribed Image Text:Problem The manager of the company X would like to check the evolution of Profit rate for 2 successive months. In order to adopt concrete improvement solutions, he wants to know: Exactly how much the profit rate changed during the 2 successive months The manager wants to know the exact causes of this change and the extent to which they have led to declining profit ratio More exactly he wants to know how and what are the influences of revenues, expenses and turnover on the change of this ratio Rp=Profit / Turnover *100 = (Revenues-Expenses)/Turnover *100 Revenues: R1=10,000 lei, R0= 11,000 lei Expenses: El= 8,000 lei, E0= 7,000 lei Turnover: T1= 6,000 lei , TO =5000 lei Profit ratio: Rp1=33% Rp0=80%
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