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Strata X Energy Executive Summary

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Net profit margin
The net profit margin measures the company’s profitability relative to its revenues. A low profit margin indicates a low margin of safety: higher risk that a decline in sales will erase profits and result in a net loss. The Gas & Oil exploration industry had an average of 4.4%. Strata X-Energy had a negative net profit margin ratio for the year 2013 which was -1045.91% and for the 2014 it was at -704.7456018%. A negative net profit margin indicates that the business is spending more than it is earning during the period. Comparing both ratios, the company has decreased the net profit margin which is a good sign for the company. This shows that the business is not earning enough to cover the company’s expenses. In order for the company to ensure that you do not run out of money, they should evaluate their operating loss for any future events.
Gross profit margin
The gross profit margin measures the proportion of sales revenue available to pay all the other operating costs after the costs of goods sold. Strata-X Energy has a gross profit margin of
-1749.21% in 2013 and - 710.78% in 2014 this shows that the company uses -710.78 % of its revenue to pay for the direct costs of making its shoes.
ROA
Return on …show more content…

This ratio measures how many times during a year the accounts receivable balance turns over. An assumption is usually made that all sales were on account, because there is usually no information in the financial statements about the percentage of credit sales verses cash sales. Strata X-Energy has the accounts receivable turnover is around ). For the 2013 year the accounts receivable turnover was 0.66, which converted to 553 days . For 2014 the accounts receivable turnover was 2.05 times, which means that the company’s accounts receivable are turning over 2.05 times per year. Also the company is collecting its receivables in about 178

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