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Avon Product Inc. Case Solution & Answer

Avon Product Inc Case Study Solution

Profitability Ratios:

The Profitability Ratios have the five level of the comparison which is as follows:

The Net Profit margin of the company shows that the Company was suffering for the net profit margin of -0.39% in the year of 2012, but now it is increased in the loss at -1.89%.

The Gross Profit margin of the company was showing the figure of 61.10% in the year of 2012, and now it is 60.53% in the year of 2016.

The Return on Investment is caring the information of that company’s income over its total assets. In this manner, the company had a negative percent of -0.57% in the year of 2012 and now is increases in a negative way at -3.16%.

The Return on equity concerned the information of that company’s income over its total capital. In this manner, the company had a negative percent of -3.45% in the year of 2012 and now increases in a negative way at -12.74% in the year of 2016.

The Earning per Share shows the information of that company’s income over its shares. In this method, the company had a negative percent of -$0.22 in the year of 2012 and now is increases in a negative manner at -$0.66 in the year of 2016. The figures show that the company has earned it income for its shareholders.

These all above matter indicates that the business has good gross margin competency, but the company is suffering from its operating expenses and the tax and the interest payment per year.

Activity Ratios

The Activity Ratio is consist of total eight components which shows the operational and financial activity of the company in days that company is working in which manner.

The inventory turnover is allowed the information of that inventory is over its revenue throughout the year. The inventory turnover was showed the figure of 3.67 in the year of 2012 and now is showing the value of 3.85 in the year 2016.

The Days of inventory is providing the information about the stock circulation of the company throughout the year. The company had the stock movement of the 3.67 days in the year of 2012, and now it is approximately as same as 3.85 days in the year of 2016.

The Net Working Capital ratio turnover provides that the company’s revenue over its net working capital. The company was enjoying the turnover of 22.56 of revenue over its Net Working Capital in the year of 2012, and now the financial statement of the company is showing the value of 10 . 12 in the year of 2016. The above matter is meaning full decrease in between of 5 years.

The Total Asset Turnover delivers that the company’s revenue over its total assets. The company was enjoying the turnover of 1.45 of revenue over its total asset in the year of 2012, and in the present year, the financial statement of the company is displaying the value of 1.67 in the year of 2016. This above provides quite increases of the revenue which covers the assets in between of 5 years.

The Fixed Asset Turnover conveys that the company’s revenue over it’s the non-current assets. The company was appreciating the turnover of 25.61 of revenue over its fixed asset in the year of 2012, and in the current year, the financial statement of the company is displaying the value of 29.30 in the year of 2016. These increases show that the company has a downfall of its fixed assets and the revenue covers the non-current assets more efficiently in between of 5 years.

The account receivable turnover allows the information of that the company has its credit sales revenue over its account receivable throughout the year. The account receivable turnover has exposed the digit of 14.25 in the year of 2012 and now is showing the value of 12.46 in the year 2016.

The account payable period sanctions the information of that the company has its account payable over its purchase per day throughout the year. The payable countermeasure screening the number of days 83.12 in the year of 2012 and now is showing the days circulation of 167.76 in the year 2016, this high increase to make the payment to the supplier…………

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