National Fabricators Essay

will remain a difficult competitor in maintaining good quality and also compete with the low

Profitability ratios are functions of both the industry and a company’s position within the industry. The boundaries are set by the operating characteristics of the industry, within these boundaries profitability ratios are determined by a player’s relative position. Gross profit margin should stay constant or increase because cost of goods sold should be a constant percentage of sales or should decrease as the company’s price increases and/or volume discounts. Gross profit margin was slightly favorable stable at 28%. The horizontal analysis information showed that sales had been averagely increased by 26% from 2001 to 2003.However the operating cost had been averagely increased by 27%.

The company, with operations in the USA, Canada, the United Kingdom, Mexico, China, and Israel, and franchises in places as diverse as South America, the Caribbean, and Asia,

Cost of goods sold in store 3 was 58.5% of sales in 2011 and in 2012 it dropped to 50.3%. This is odd because sales and inventory had increased from 2011 to 2012. When sales increase costs of goods should rise respectively. If a business is becoming more profitable the inventory generally doesn’t increase considerably. This increase in inventory could be due to obsolescence. All of these factors don’t add up to an increase in sales.

In addition, to that it is important to notice that their total expense represents 87% of their revenue in 2013 (See Exhibit 1). Moreover, if we look at the profit margin, it highlights the fact that the company is generating a low amount of profit compare to the amount of revenue. It is important to notice that it could reveal that the company profitability is not very

The threat of substitutes being strong and the large amount of competitors offering relatively undifferentiated products makes it difficult for industry members to make attractive profits

Focused growth strategy of the company has helped it to reach wide number of customers and diversify its revenue streams.

This factor of other firms venturing the market with low prices will finally lead the existing firms in industry to incur very big losses and this will force them to adjust, by lowering their

The company shows increase in profits for the year 2012, when it is estimated at 10.43%. The Gross Profit for the year 2011 was 9.09%, which is considerably lower than the average 11.85 %. The Gross Profit Margin ratio is regarded as ‘a test of the

Even though the company showcased lower than expected revenue, the company remains profitable which can be measured with the Return on Assets (ROA) ratio. The software/infrastructure industry has an average ROA of 8.18% compared to F5’s ROA of 15.9%. This indicates that for each dollar invested in assets, the company generates on average 15.9 cents in profit. The Return on Sales (ROS) of a company allows investors to see how much profit the company is generating per dollar of sales. F5’s ROS is 18.3% which means that they earn 18.3 cents for every revenue dollar resulted in profit. F5’s asset turnover is 0.865 compared to the industry’s average of 0.41 which dictates that they generate 0.865 in revenue for every dollar invested in assets. In order to do an even deeper analysis for F5, I looked at the Gross Profit Margin (GP %) and found that F5’s Gross Margin is 83.33% compared to the industry’s average of 63.73 percent. This means F5 earns 83 cents on the dollar in gross margin.

The company intends to setup a new branch in Toronto by the end of this financial year. The firm has confidence in their solid base of customers despite the slow growth indicators experienced in the industry. With its increasing number of medium sized corporations as clients, the company has felt the pressure and this has necessitated the firm expansion

At the end of quarter 2 the Gross Profit of the company was $ 1,031,772 with the operating profit $ 118,983. The company strived to achieve the operating profit in positive numbers however it was taken into consideration that the operating profit might result in negative numbers during the initial stage. However,

Since the issue of the company’s declining profit margin has arisen, the company has been dealing with both macro and micro problems within the organization. On the macro level, the company need to deal with their operational goals since this is the issue at hand. The company’s profit margin has decreased as a result of not focusing on their operational target. Before implementing the project, Mr. West needs to take into consideration all the pros and cons of

In the U.S. the motor industry employed in 2008 around 880,000 workers that is around 6.6% of the manufacturing workforce and this include workers who put cars together to the workers who assembles the motors for these vehicles, since the turn of the decade the automotive industry has managed to eliminate 435,000 of manufacturing jobs that is equal to 3.3% of all manufacturing jobs that existed in 2008.

THREATS • Price wars with competitors • Stricter health and technical standards • Reduced benefits • Competition