Sample Essay Gross Profit Margin
The gross profit margin is a financial ratio used to evaluate the profitability of a firm’s core operations exclusive of its fixed costs[1]. Gross profit margin = revenue-cost of sales/revenue.
| RATIOS | 2004 | 2005 | 2006 | 2007 |
| Gross Margin (%)-Google | 58,60 | 62,80 | 65,55 | 65,76 |
| Gross Margin (%)-Yahoo | 62 | 60 | 58 | 59 |
ROCE
ROCE is a short form for return on capital employed. It is a measure of the returns that a company or business realizes given the capital that was used or employed. It can be used to measure performance between businesses or to evaluate whether a business produces enough returns to be able to pay for the cost of its capital. ROCE=earnings before interest and taxes (EBIT)/capital employed. Capital employed is given by total assets and current liabilities.
| RATIOS | 2004 | 2005 | 2006 | 2007 |
| Return on Capital Employ.(%)-Google | 21,9 | 22,49 | 23,36 | 24,36 |
| Return on Capital Employ. (%)-Yahoo | n.a. | n.a. | n.a. | n.a. |
[1] Berman, Karen (2006). Financial Intelligence.Boston:HarvardBusinessSchool Press
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