Debenhams Gross Profit Margin
Gross Profit Margin
Gross profit margin is useful to assess Debenhams' financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold; therefore, it is considered to be one of best economic tools for measuring and analyzing the data of Debenhams PLC.
Comparing the GPM in 2014 with in 2013, it decreased 1.05% from 13.13% (2013) to 12.08% (2014). Although the total revenue increased £30.5 million, gross profit decreased £20.3 million. There are 3 possible related causes. The foreign exchange loss which within cost of sales has reduced is one reason. And the performance in the first half year was impacted by lower than expected sales in UK clothing business, which meant more stock during the post-Christmas …show more content…
To compensate for some effective business strategies which may require a short-term decrease in the gross profit margin, Debenhams attempted to raise its operating profit margin. The financial report of Debenhams PLC in 2014 shows that operating profit increased £26.8 million gradually and revenue increased. And it indicates that the company had an excellent quality level in investing and operating system deposit comparing with 2013 the NPM in 2014 decreased 1.25%.
Debenhams moved into a phase of trials which aim to increase sales densities by offering a wider choice of product categories, brands and services (Michael Sharp, 2014). And its ongoing channel shift from store-based shopping to online. Debenhams changes from a UK department store model to an international, multi-channel model. These decisions could contribute to a meaningful increase of operating profit, although the results do not significantly appearance.
Based on OSIRIS database, the revenues of Debenhams rose steadily since 2010, but PBIT had an apogee in 2011, and then kept declining, and it result in the reducing of NPM in these 4
Gross profit margin is useful to assess Debenhams' financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold; therefore, it is considered to be one of best economic tools for measuring and analyzing the data of Debenhams PLC.
Comparing the GPM in 2014 with in 2013, it decreased 1.05% from 13.13% (2013) to 12.08% (2014). Although the total revenue increased £30.5 million, gross profit decreased £20.3 million. There are 3 possible related causes. The foreign exchange loss which within cost of sales has reduced is one reason. And the performance in the first half year was impacted by lower than expected sales in UK clothing business, which meant more stock during the post-Christmas …show more content…
To compensate for some effective business strategies which may require a short-term decrease in the gross profit margin, Debenhams attempted to raise its operating profit margin. The financial report of Debenhams PLC in 2014 shows that operating profit increased £26.8 million gradually and revenue increased. And it indicates that the company had an excellent quality level in investing and operating system deposit comparing with 2013 the NPM in 2014 decreased 1.25%.
Debenhams moved into a phase of trials which aim to increase sales densities by offering a wider choice of product categories, brands and services (Michael Sharp, 2014). And its ongoing channel shift from store-based shopping to online. Debenhams changes from a UK department store model to an international, multi-channel model. These decisions could contribute to a meaningful increase of operating profit, although the results do not significantly appearance.
Based on OSIRIS database, the revenues of Debenhams rose steadily since 2010, but PBIT had an apogee in 2011, and then kept declining, and it result in the reducing of NPM in these 4