Companies
A、and
B、are both involved in retailing. Relevant information for the year ended 30 September 20X1 was as follows:
A、B $000 $000 Sales revenue 50,000 200,000 Profit 10,000 10,000 Capital employed 50,000 50,000 Which of the following statements is true?
A、The profit margin of both companies is the same
B、Company
B、is generating more profit from every $1 of asset employed than Company
A、C Company
B、is using its assets more efficiently
D、Company
B、is controlling its costs better than Company A
A、and
B、are both involved in retailing. Relevant information for the year ended 30 September 20X1 was as follows:
A、B $000 $000 Sales revenue 50,000 200,000 Profit 10,000 10,000 Capital employed 50,000 50,000 Which of the following statements is true?
A、The profit margin of both companies is the same
B、Company
B、is generating more profit from every $1 of asset employed than Company
A、C Company
B、is using its assets more efficiently
D、Company
B、is controlling its costs better than Company A
【参考答案及解析】
Company B has a higher asset turnover and is therefore using its assets more efficiently than A. The two companies have the same ROCE and are therefore generating the same profit from every $1 of asset employed. The profit of the two companies is the same but company A has a higher profit margin and is therefore controlling its costs better than company B. The calculations are:
Company B has a higher asset turnover and is therefore using its assets more efficiently than A. The two companies have the same ROCE and are therefore generating the same profit from every $1 of asset employed. The profit of the two companies is the same but company A has a higher profit margin and is therefore controlling its costs better than company B. The calculations are: