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Operating Profit Margin Ratio

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Operation Profit Margin Ratio The operating profit margin is part of the profitability ratios. The operating profit margin looks at the difference of the operating income divided by the total sales of a company. Steven Madden Ltd operating profit margin in 2016 was 12.1% which decreased compared to 12.2% in 2015. In the past years, the ratio analysis reveals that over the years the profitability of the company improves from $43.1 million in 2007 to 140.5 million in 2015. A change took place in 2016 when the operating income decreased to $16.9 million from $17.2 million in 2015. This did not stop Madden from making $52.2 million dollars in profit and sales were 1.4 billion. The increase in operating profit margin can be from the full year ending …show more content…

This ratio is a part of the liquidity ratios and is the most commonly used (p. 52). Madden’s current ratio in 2016 was 55.77% which was increased from 50.07% in 2015 by a 10.22%. The current ratio for 2016 was 2.96% and in 2015 the current ratio was 2.62% with a difference of 11.49%. Madden’s inventory is the lowest current asset and book value to the current ratio. The low current ratio could suggest that Madden has problems with their inventory management …show more content…

For Madden in 2016, the operating cash flow increased to 14.02%. compared to -11.35% in 2015. This was an applaudable leap for the company. In fact, the company profit indicates Madden generated sufficient positive cash flow. This positive cash flow maintains in 2016 and grew in operations. Madden operation cash flow for 2016 was $144.59 million. In 2016, Madden had 18.82% current liabilities. In 2015, their current liability was 19.12% with a -1.57% difference.
Market-To-Book Ratio The market-to-book ratio measures the amount that investors will pay. This ratio is a part of the market value ratio. The market-to-book ratio is the market price per share divided by the book value per share. The current book value in the second quarter as of June 2017 is 6.99%. The book value per share increased for 11.97 in 2016. In 2015 the book value was 11.10 by a difference of 7.84. The market-to-book ratio gives Madden the product of the share price times the total number of shares outstanding.

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