Financial Statement Analysis of IOI Group

This means that the company had decreasing in its additional inflow from extra unit of sales. However, this situation also happened at Sima Darby, so it may influenced by the external issues such as macroeconomic which cause the enterprises to lower their selling price or the cost of goods sold may getting rise up. Furthermore, this ratio also shows the ability for the company to manage its cost of inventory and how well it passes the cost to its consumers. Hence, the larger the figure percentage of gross profit margin means that the better the company can perform well in controlling its business inventory and the greater the company's expected profitability (Alexander and Nobes, 2010). Nevertheless, it is usually calculates the net profit margin as well due to the incomplete material of data enabling to entirely change of the result between gross profit and net profit because some data may be absent. The net profit margin shows that IOI Group had earn 13.11 percent of every ringgit in its revenue, but with compare to the year of 2011 and 2012, there are 17.73 percent and 15.21 percent respectively and this comparison shows that it had gradually decrease of earning until 2013. However, even if IOI Group had decreasing in its profit but it is still perform better than Sime Darby which it only had 9.53 percent of profit in per unit of sale. .
             On the other hands, net operating profit margin is also require to consider before investing because it can show the operating efficiency of the company. It can send a lot of important information to a company while making decision especially with warns to notice the cost control. IOI Group had a high net operating margin which is 14.06 percent compare with Sime Darby which only had 9.91 percent. This ratio shows that IOI Group had a greater cost and activity management compare with Sime Darby. Thus, profit margin is one of the ratios that can help the investor to evaluate the company but it is best used for comparing enterprise within the same industry that has similar revenue standard and business model.