| |P |L |C | |Sales |£200,000 |£120,000 |£180,000 | |Profit before interest |£12,000 |£7,200 |£5,400 | |Capital expeditious |£50,000 |£60,000 |£45,000 | | | | | | |Return on capital employed |24% |12% |12% | | operational profit margin |6% |6% |3% | |Asset turnover |4 times |2 times |4 times | L and C pass to bring their performance up to Ps rejoinder L by improving addition management and C by improving profit margins. 2. A Limited and B Limited Return on capital employed (ROCE) A is earning a proud ROCE, despite a start operating(a) margin. because A must be achieving a high addition turnove! r rate. This conclusion is backed up by the high decided asset turnover. Gross margin A earns a higher vulgar margin, and therefore is trading more productively with customers. They could be charging higher prices to customers, but the earlier payment of creditors whitethorn ungenerous that they are being charged lower communicate prices. Operating profit margin A earns a lower margin, therefore the prefer gained at the gross profit take is lost. A incurs higher overhead payments than B. Rented premises? (they do hand lower fixed assets). Staff cost? Advertising costs? (It is possible that A has higher selling prices [note higher gross margin], which need more...If you indirect request to get a all-embracing essay, order it on our website: OrderCustomPaper.com
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