Financial Analysis - Essay 2

Financial Analysis - Essay 2

  • Submitted By: pita26
  • Date Submitted: 09/16/2011 2:38 AM
  • Category: Business
  • Words: 1823
  • Page: 8
  • Views: 537

1. Profitability Ratio

|Operating profit margin |2009 |% |2008 |% |2007 |
|ERAWAN |0.049 |-66.9 |0.148 |-35.7 |0.230 |
|DTC |-0.018 |-117 |0.106 |34.2 |0.079 |
|SHANG |0.180 |-5.8 |0.191 |-40.5 |0.321 |
|OHTL |0.117 |-40.91 |0.198 |-18.18 |0.242 |
|Industry |0.082 |-49.1 |0.161 |-26.1 |0.218 |

The profit margin tells us how much the company will receive for every baht of sales. For all these four companies, their net profit margin has decreased from the period of 2007-2009. Operating profit margin indicates a company’s efficiency in controlling its costs and expenses associated with its normal business activities. If a company’s margin is increasing, it is earning more per baht of sales. The higher the margin, the better it is for the firm. These companies’ lowered operating profit margins may have resulted from higher fixed costs or decreased in revenues. In comparison, SHANG seems to have higher operating profit margin in both 2007 and 2009 while in 2008 OHTL showed a higher margin.

|Return on equity |2009 |% |2008 |% |2007 |
|ERAWAN |-0.056 |-251 |0.037 |-70.2 |0.124 |
|DTC |-0.028 |-151 |0.055 |71.9 |0.032 |
|SHANG...

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