Financial Analysis Assignment Example | Topics and Well Written Essays - 750 words - 2

Financial Analysis - concession ExampleProducts that are used on a daily basis enhance the asset turnover rate. A supermarket has consumables products that are consumed on a daily basis that is why it will have the highest asset turnover followed by a steel company because of constructions. Pharmaceutical retailer will depend on health state of its client. The current lifestyle has impacted the health status of people, consequently increase in pharmaceutic services is on the rise. However, asset turnover is concerned with the revenue, not profit. That being the case then melodious instrument might have the highest profit than the others.Sales margin is also the gross margin. It is the revenue a firm earns after making sales. It should be known that sales margin is inclusive of the operating expenses thus it cannot be used to determine the profitability of a firm. A supermarket will have the lowest sales margin because a small mark-up is attached to the price it bought for the g oods as a profit. The idea to add a small mark-up is the competitiveness of supermarkets and high sales rate. The prices of Tesco and Sainsburys supermarket are very competitive which attract consumers. A musical instrument retailer will have the highest sales margin this is because the sale of musical instruments is slow. To screening up the cost of operating expenses, the retailer will have to add markup that settle the income and operating expenses. decease on Equity ( roe) is a financial measure to determine how efficient a firm is in maximizing the cede to the shareholders equity. A firm needs to have a high ROE to lure other investors. ROE has three components namely return on sales, asset turnover, and financial leverage. In 1995, Chrysler had ROE of 20% while track had 8%. The difference can be explained by the three components. Firstly, it seems that Ford had low asset turnover meaning the sales in 1995 was low for its automobile. Secondly, it had a low return on sales. The profit generated