https://padlet.com/lee_ai_lian_a/glnv2a9088j3 Profitability Ratios en-us 2017-05-30 06:49:26 UTC 2017-05-31 01:50:14 UTC hello@padlet.com lee_ai_lian_a https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174522852 As a group, share your answers for part (c) and (d)]]> 2017-05-31 00:16:13 UTC https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174522852 https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174527330 (c) Pinewood Furnishings has performed generally better than Teakwood Furnishings . Pinewood's  profit margin is 12.54% which is 2.54% higher than Teakwood's which  is 10%. Thus, Pinewood is more profitable than Teakwood. Pinewood Return on equity of 16.47% is 5.47% higher than Teakwood's reequity of 11%. Pinewood's inventory turnover rate is 6.22 times which is 1.47 times higher than Teakwood's 4.75 times. However, Pinewood's gross profit mark-up of 60% is 5% lower than Teakwood's 65%.Pinewood's percentage of expenses to net sales revenue is 24.96% which is 14.84% lower than Teakwood's 39.80%, this shows that Pinewood has lesser expenses compared to Teakwood. Therefore, Pinewood performed better than Teakwood.

(d) 1. buy goods at a cheaper value
      2.take long term loan]]> 2017-05-31 01:02:56 UTC https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174527330 https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174527930 c)Pinewood Furnishings has a higher profitability than Teakwood Furnishings. This is indicated by the higher profit margin of 12.54% of Pinewood Furnishings as compared to 10% of Teakwood Furnishing.This shows a difference of Pinewood Furnishings enjoying 2.54 cents more profit per one dollar of net sales revenue.  This is due to Pinewood Furnishings buying their goods at a lower price as compared to Teakwood Furnishings. 

The inventory turnover rate of Pinewood Furnishings is 6.22 times faster as compared to Teakwood Furnishings which is 4.75 times slower. This shows Pinewood Furnishings having 1.47 less times at which inventory is sold or replaced during the year as compared to Teakwood Furnishings. This could be due to Pinewood Furnishings experiencing slower sales.

The return of equity of Pinewood Furnishings is 16.47% as compared to Teakwood Furnishings of 11%, this shows a difference of 5.47 cents of profit earned for every dollar of equity. 

d)The two ways for Teakwood to increase its profit margin can be to reduce rental expense by looking for alternative shop space and reduce interest expense by taking lesser loan from bank.]]> 2017-05-31 01:09:04 UTC https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174527930 https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174528112 Pinewood Furnishings is more profitable than Teakwood Furnishings.  
Although PWF has a lower gross profit margin of 60% to TWP of 65% by 5%, it has a higher profit margin of 12.54% than TWF of 10% by 2.54% . PWF has a lower percentage of expenses to net sales revenue of 24.96% compared to TWF of 39.80%,  which means that the business is more efficient because they incurred lesser expenses.
PWT has a higher inventory turnover rate of 6.22 times than TWF of 4.75 times. This signifies PWT has a better sales volume or that they bought their inventory in smaller bulk. 

(d)
1. Reduce rental expense by looking for alternative shop space.
2.Reduce interest expense by taking lesser loan from the bank.]]> 2017-05-31 01:11:23 UTC https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174528112 https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174528199 Pinewood Furnishing profitability's position is doing better than Teakwood Furnishings. Pinewood's profit margin of 12.54% is higher than Teakwood's profit margin of 10% is due to the business's efficiency in managing its expense and its evident in it's percentage of expenses to net sales revenue of 24.96% being lower than Teakwood's of 39.80%. However, Pinewood's gross profit margin of 60% is lower than teakwood's profit margin by 5%. This may be due to taekwood's higher expenses of 39.80%. 
Pinewood also has a higher inventory turnover rate. This may be due to Pinewood having higher sales rate.
D) Through aggressive advertisement and promotion and source for cheaper inventory]]> 2017-05-31 01:12:26 UTC https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174528199 https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174528460 c) Pinewood Furnishings is more profitable than Teakwood Furnishings. Even though Teakwood has a higher Gross Profit mark-up of 65%, 5% more than Pinewood's 60%, its profit margin is 10%, 2.54% lesser than Pinewood's 12.54%. This could be due to the lower operating expense of Pinewood Furnishings as compared to Teakwood.

Teakwood's percentage of expense to net sales revenue is 39.80%, 14.84% more than Pinewood's 24.96%. Teakwood spends 39.8 cents of net sales revenue per $1 of expense while Pinewood spends 24.96 cents. This could be due to Pinewood's higher business efficiency.

Pinewood has a higher return on equity of 16.47%, 5.47% more than Teakwood's 11%. This shows that Pinewood has a better profit than Teakwood. Pinewood earns 5.47 cents of profit more than Teakwood.

Pinewood has a higher inventory turnover rate of 6.22 times, 1.47 times more than Teakwood's 4.75 times. Pinewood replaces its inventory 6.22 times per year while Teakwood replaces its inventory 4.75 times per year. 

d) Teakwood can reduce its operating expenses by improving its business efficiency or it can sell more goods through effective advertising and promotion.]]> 2017-05-31 01:15:37 UTC https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174528460 https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174528988 Pinewood Furnishings is more profitable than Teakwood Furnishings. This is indicated by the higher mark-up on cost of 12.54% as compared to Teakwood 10%.Pinewood is less profitable than Teakwood. This is indicated by the higher gross profit margin of 60% as compared to Teakwood's 65%. This is indicated by Pinewood's much lower of 24.96% compared to Teakwood's  39.80%.Pinewood has higher inventory turnover of 6.22 times compared to Teakwood's 4.75 times. This is because Pinewood probably sells more goods than Teakwood so they have to restock more. Thus explaining the higher inventory turnover rate. The goods also probably did not meet the customers' needs or tastes.]]> 2017-05-31 01:21:16 UTC https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174528988 https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174529575 hi friends, have a great day ahead.]]> 2017-05-31 01:26:41 UTC https://padlet.com/lee_ai_lian_a/glnv2a9088j3/wish/174529575