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Cost Analysis Of Nestle

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The gross profit margin refers to the ratio that calculate the profit of a company could be earn after the costs of goods sold of the company was being paid. A higher gross profit margin would indicate the more efficiency of the company in using their raw materials. For the gross profit margin of the company, since the costs of goods sold is zero during 2014 and 2015, so there is no any changes for both of the year, which remains at 100%. This shows that Nestle (Malaysia) Berhad was able to manage their assets effectively during these two years.

The return on total assets refers to the ratio that shows a company whether it can be able to manage their assets efficiently in order to earn more profits at that particular period of time. …show more content…

This shows that Nestle (Malaysia) Berhad was able to manage their assets efficiently in order to boosts the sales, in which it may due to increasing in profit after taxes from 2014 to 2015.

The return on shareholders’ equity refers to the profitability of a company in which it generate the profits by using the money that invested by the shareholders. A higher ratio indicate a company is using the money invested efficiently. For the return on shareholders’ equity of the company, it is increasing from 81.24% in 2014 to 106.38% in 2015, in which it may due to decreasing in total shareholders’ equity from 2014 to 2015.

The operating profit margin refers to the ratio that used to determine whether or not the business operating by the company is able to earn at a reasonable profit. The higher the ratio, the bigger amount of the money that generated by the company from it’s business to cover the costs which including fixed as well as variable. For the operating profit margin of the company, there is a slightly increase from 99.51% in 2014 to 99.69% in 2015. This shows that Nestle (Malaysia) Berhad had the bigger amount of money after deducting the costs compared to previous …show more content…

The higher the ratio, the more ringgit of a company convert the revenue into the profit. For the net profit margin of the company, it is slightly increase from 99.99% in 2014 to 100.04% in 2015. This may be due to increasing in the price of the product selling by Nestle (Malaysia) Berhad.

The debt-to-equity ratio refers to the percentage of money invested by shareholders to a company. The higher the ratio, the more risky of the company for the shareholders to invested. For the debt-to-equity ratio of the company, it shows a slightly increasing ratio from 0.0025:1 in 2014 to 0.0027:1 in 2015. This shows Nestle (Malaysia) Berhad is a bit risky to be invested compare to the previous year.

The equity ratio refers to the amount of money that a company used to finance the assets by using the money invested by the shareholders. The lower the ratio, the higher the ability of the company had to pay back the long term debt. For the equity ratio of the company, there is a slightly decrease from 99.75% in 2014 to 99.73% in 2015. This shows that Nestle (Malaysia) Berhad had increase the ability to pay back the

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