The profitability ratios measure the university’s ability to earn profits, relative to their associated expenses. Although FEU has less money on each product (includes school items, books, university caps and jacket, etc. ) it sells because of –5. 00% in gross profit margin, it still able to effectively control its costs and provide goods or services at a price significantly higher than its costs which indicated by +21. 00% increased in net profit margin. It also shows that FEU has efficient management. Another positive indicators are the return on assets (+33. 00%) and return on equity (+13. 00%) that shows their assets are well managed and their resources were used efficiently compare to the other university as well as their competitors. It also shows an increase its profit generation without needing as much capital and indicates how well FEU's management deploys shareholder capital.
How can FEU improve its gross profit margin? It is recommended to reduce the cost of goods or products sold without changing your selling price. A decrease in cost of goods sold will cause an increase in gross profit margin. Finding lower-priced suppliers, cheaper raw materials, using labor-saving technology, and outsourcing, are some ways to lower the cost of goods sold.
Lastly, Price/Earnings Ratio is the ratio for valuing a university that measures its current share price relative to its per-share earnings. It shows –9. 00% drop in this ratio which indicate that the current stock price is low relative to earnings. While a low P/E ratio might indicate a cheap stock that has the potential for significant growth, it could also indicate the university that is floundering in the market and is about to go under.
After conducting a financial ratio analysis, FEU is still financially healthy based on trend in their financial performance on year 2018-2020. This is due to efficient management of their assets and liabilities, and other financial resources that are well-utilized.
The profitability
ratios
measure the
university’s
ability to earn
profits
, relative to their associated expenses. Although
FEU
has less money on each product (includes school items, books,
university
caps and jacket, etc.
)
it sells
because
of –5. 00% in gross
profit
margin
,
it
still
able to
effectively
control its
costs
and provide
goods
or services at a
price
significantly
higher than its
costs
which indicated by +21. 00% increased in net
profit
margin
. It
also
shows
that
FEU
has efficient management. Another
positive
indicators are the return on assets (+33. 00%) and return on equity (+13. 00%) that
shows
their assets are well managed and their resources were
used
efficiently
compare to the other
university
as well
as their competitors. It
also
shows
an increase its
profit
generation without needing as much capital and
indicates
how well
FEU
's management deploys shareholder capital.
How can
FEU
improve
its gross
profit
margin
? It
is recommended
to
reduce
the
cost
of
goods
or products sold without changing your selling
price
. A decrease in
cost
of
goods
sold will cause an increase in gross
profit
margin
. Finding lower-priced suppliers, cheaper raw materials, using labor-saving technology, and outsourcing, are
some
ways to lower the
cost
of
goods
sold.
Lastly
, Price/Earnings
Ratio
is the
ratio
for valuing a
university
that measures its
current
share
price
relative to its per-share earnings. It
shows
–9. 00% drop in this
ratio
which
indicate
that the
current
stock
price
is low relative to earnings. While a low P/E
ratio
might
indicate
a
cheap
stock that has the potential for significant growth, it could
also
indicate
the
university
that is
floundering in the market and is about to go under.
After conducting a financial
ratio
analysis,
FEU
is
still
financially
healthy based on trend in their financial performance on year 2018-2020. This is due to efficient management of their assets and liabilities, and other financial resources that are well-utilized.