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Pioneer Trading is more profitable than New Age Trading.

The mark-up on cost of Pioneer Trading, at 38.46, is higher than that of New Age Trading, at 36.00%. Gross profit margin of Pioneer Trading, at 27.78% is also higher than that of New Age Trading, at 26.47%. The profit margin of Pioneer Trading, at 11.11% is also higher than the profit margin of New Age Trading, at 7.00%.

Use terms like 'better' or 'worse' instead of higher or lower. Also remember the '%'

Pioneer Trading may also place the selling price on its products (??) or purchase its inventory at a lower cost price than New Age Trading. Hence, Pioneer Trading is making a higher gross profit margin than New Age Trading. This means that Pioneer Trading is better able to manage its expenses (this relates to profit margin, not gross profit margin) as compared to New Age Trading. This could be due to the higher gross profit Pioneer Trading is making or the lower expenses that Pioneer Trading incurs.

Overall, Pioneer Trading is more profitable than New Age Trading.

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The mark-up cost of Pioneer Trading of 38.46% is better than that of New Age Trading at 36.00%. The gross profit margin of Pioneer Trading of 27.27% is better than that of New Age Trading at 26.47%.

This means that Pioneer Trading is able to earn a higher profit for every dollar of net sales revenue and cost of sales.

This can be due to Pioneer Trading being able to set a higher selling price on its products or purchase its inventory at a lower cost price than New Age Trading. Hence, Pioneer Trading is making a higher gross profit than New Age trading.

Moreover, the profit margin of Pioneer Trading of 11.11% is better than that of New Age Trading at 7.00%. This can mean that Pioneer Trading is better able to manage its expenses than New Age Trading. This could be due to the higher gross profit Pioneer Trading is making, or the lower expenses that New Age Trading. incurs.

Overall, Pioneer Trading is more profitable than new Age Trading.

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a)(i) mark-up on cost = gross profit/ cost of sales = 250000/ 650000 x 100% = 38.46%

(ii) gross profit margin = gross profit/ net sales revenue = 250000/ 900000 x 100% = 27.78%

(iii) profit margin = profit for the year/ net sales revenue = 100000/ 900000 x 100% = 11.11%

b) Pioneer Trading is more profitable than New Age Trading.

The gross profit margin of Pioneer trading is 27.78% whereas New Age Trading is 26.47%. This shows that for Pioneer Trading, they earn more gross profit for every dollar of its net sales revenue as compared to New Age Trading. This could be due to Pioneer Trading selling its goods at a higher selling price as compared to New Age Trading.

Thus, Pioneer Trading is more profitable than New Age Trading.

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The mark-up on cost of Pioneer Trading of 38.46% is better than that of New Age Trading of 36.00%. The gross profit margin of Pioneer Trading at 27.78% is better than that of New Age Trading at 26.47%.
This means that Pioneer Trading is able to earn a higher gross profit for every dollar of net sales revenue and cost of sales. This can be due to Pioneer Trading being able to set a higher selling price on its products or purchase its inventory at a lower cost price than New Age Trading. Hence, Pioneer Trading is making a higher gross profit than New age Trading.
Moreover, the profit margin for Pioneer Trading at 11.11% is better than that of New Age Trading at 7.00%. This can mean that Pioneer Trading is better able to manage its expenses as compared to New Age Trading. This could be due to the higher gross profit Pioneer Trading is making, or the lower expenses that Pioneer Trading incurs.
Overall, the Pioneer Trading is more profitable than New Age Trading.
-Jaylyn

Good analysis.

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The markup on cost for Orange Pte Ltd of 25.00% remained the same in all three years 20X2, 20X3 and 20X4. The gross profit margin of 20.00% remained the same in 20X2, 20X3 and 20X4.

This means that there is the the same amount of gross profit to cover the operating expenses. This can be due to Orange Pte Ltd being able to retain (??) their costs of sales and their selling prices throughout all three years, Hence, this would lead to equal gross profits in all three years.

Do you mean same amount of gross profit for every dollar of net sales revenue? The absolute gross profit is different every year.

Furthermore, its profit margin

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The profit margin improved from 7.49% in 20X2 to 9.47% in 20X3. This means that the business is better able to manage its operating expenses in 20X3 than in 20X2. This could be due to more additional income  and lower expenses. Thus, the business may then be able to expand its operations and distribute more of its earnings to its shareholders. Overall, this shows an improvement of the profitability of the business from 20X2 to 20X3.

The profit margin improved  from 9.47% in 20X3 to 12.1% in 20X4. This means that the business is more able to manage its operating expenses in 20X4 than in 20X3. This could be due to  additional income from discount allowed and lower rental expense. Thus, the business may then be able to expand its operations and distribute more of its earnings to its shareholders. This overall shows an improvement of the profitability of the business from 20X3 to 20X4.

If the trend is consistently increasing or decreasing, there's no need to separate the analysis into 2 paragraphs since it will be the same answer.
What about mark-up on cost and gross profit margin? No comments?

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a)(i) mark-up on cost
20x2 = gross profit/ cost of sales x100% = 57685/ 230740 x 100% = 25%

20x3 = 67798/ 271192 x 100% = 25%

20x4 = 58312/ 233248 x 100% = 25%

(ii) gross profit margin = gross profit/ net sales revenue x 100%

20x2 = 57685/ 288425 x 100% = 20%

20x3 = 67798/ 338990 x 100% = 20%

20x4 = 58312/ 291560 = 20%

(iii) profit margin = profit for the year/ net sales revenue x 100%

20x2 = 21605/ 288425 x 100% = 7.49%(2dp)

20x3 = 32115/ 338990 x 100% = 9.47%(2dp)

20x4 = 35165/ 291560 x 100% = 12.06%(2dp)

b) Based on Orange Pte Ltd's profit margin, it has an increasing trend of 7.49% in 20x2 to 9.47% in 20x3 to 12.06% in 20x4. This could be due to Orange Pte Ltd selling its goods at a higher selling price and buying its goods at a lower cost price.

Avoid using terms such as increasing or decreasing - is it better or worse?

Analysis is too short.

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The mark-up on cost for Orange PTE LTD has remained the same from 20X2 to 20X4 at 25.00% . The gross profit margin has remained the same from 20X2 to 20X4 at 20.00%. The profit margin has improved from 7.49% in 20X2 to 12.06 in 20X4. State the figures for 20X3 as well.

This means that there is the same gross profit to cover the operating expenses. This can be due to Orange PTE LTD setting the same selling price and purchasing the inventory at the same cost price throughout all the three years. Hence this would lead to the same gross profit in all three years.

Further, its profit margin has improved from 7.49% in 20X2 to 12.06% in 20X4. This can mean that the business is more able to manage its operating expenses in 20X4 than in 20X2. This could be due to the better gross profit margin, higher additional other income and/or lower expenses. The business would then be able to expand its operations.

State the specific expenses that have caused the change.

Overall, the profitability of the business has improved over the years from 20X2 to 20X4.

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The profitability of Orange Pte Ltd has improved from 20X2, 20X3 and 20X4.

The mark-up on cost for 20X2, 20X3 and 20X4 are the same, at 25.00%. Gross profit margin for 20X2, 20X3 and 20X4 are the same, at 20.00%. The profit margin has improved from 7.49% in 20X2 to 9.47% in 20X3, to 12.06% in 20X4.

This means that the business is more able to manage its expenses over the 3 years, from 20X2 to 20X4.  This could be due to the better gross profit margin, higher additional income and lower expenses. The business would then be able to expand its operations.

Overall, the probability of Orange Pte Ltd has improved over the years from 20X2 to 20X4.

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b) The mark-up on cost for Orange Pte ltd remained the same at 25.00% in 20X2, 20X3, and 20X4. The gross profit margin has remained the same at 20.00% in 20X2, 20X3, and 20X4.
This means that the gross profit for every dollar of net sales revenue and cost of sales remained the same. This can be due to Orange Pte ltd selling its products and purchasing its inventory at the same price over the three years. Thus, this leads to the gross profit remaining the same from 20X2 to  20X4.
However, the profit margin improved from 7.49% in 20X2 to 9.47% in 20X3 to 12.06% in 20X4. This can mean that Orange Pte Ltd is more efficient at controlling its expenses in 20X4 than in 20X3 and 20X2. This could be due to higher additional other income and/or lower expenses. This is mainly due to the savings in the rental expenses as the business bought a property in 20X4. The business also sold away their motor vehicles in 20X3 hence saved on the depreciation expenses in 20X3 and 20X4. Hence the business made a higher profit for the year in 20X3 and 20X4 and would be able to expand its operation and have more profit distribution to its owners.
Overall, the profitability of Orange Pte Ltd has improved over the years from 20X2 to 20X4.
-Jaylyn