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Sport and Deviance


Dickie Dirt Ltd has therefore increased both gross profit margin and net profit margin steadily in the past three years. This reflects positively on the companies' profitability ratios. .
             According to Pizzey, A (1998) the return on capital employed ratio (ROCE) tells us how much profit we earn from the investments the shareholders have made in their company. The resulting ratio represents the efficiency with which capital is being utilised to generate revenue. In 2001 Dickie Dirt's Ltd recorded ROCE at 8.28% with it falling slightly to 7.47% in 2002. This indicates that profit earned from investment by current shareholders has slowed up in the past year, deteriorating by .8%. At 8.28% for 2001 and 7.47% in 2002 still perhaps represents a fairly return on investment employed. Reasons for this could be from the purchase of new fixed assets or an increase in liabilities. .
             3.2 Working capital efficiency ratios.
             Working capital efficiency ratios refer to stock, debtors and creditors control' (Tamminen, R. 1976). As explained above working capital is concerned with the ability of a business to be able to pay its way. The four ratios that are used under working capital efficiency ratios are concerned with spending and saving money at the right time in the right place. If a company has too much stock than it wastes money on storing it let alone buying it. If too much money is loaned out then the company may not be able to use that money for something else. All in all man management of the cash flow is paramount in this business. .
             The first ratio, which relates to working capital efficiency ratio, is the debtor's collection period. The resultant figure of the debtors collection period refers to he figure measures (in number of days) how long on average it has taken the firm to collect its debts. The higher the figure the longer it has taken. The normal period for collecting debts will differ between industries Firms such as Dickie Dirt who do a lot of business on credit though will have much higher debt collection periods.


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