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Business Propasl for Increasing Profits While Cutting Expenses

Essay by   •  February 6, 2012  •  Essay  •  341 Words (2 Pages)  •  1,945 Views

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Operating Profit Margins

v Operating Profit Margins is the percentage of the business's total revenue that remains after all operating costs are deducted.

§ § §

Important information about the firm's profitability.

Cost control

Indicates how much profit a company makes after paying for variable cost such as wages, raw material, etc.

v Artemis will incorporate using (EBITDA) which removes factors that change the view of performance depending upon the accounting and financing policies of the business. This estimate will get us closer to actual cash flow.

§ Popular measure of financial performance

§ Earning before interest, taxes, depreciation

Operating Profit Margins v Operating Margin

v EBITDA Formula

§ Net operating Revenues $20,088

§ Gross Profit $15,924

§ Operating Income $6,318

§ Income Before Taxes $6,578

§ Net Income $5,080



Operating Profit Margins

7

A. B.

C.

Operation Cuts Proposal

Artemis current Gross Profit Margin decrease

Areas proposed for expense cuts

1. Discuss each area cuts and effects 2. Proposed savings for our company

Conclusion regarding cuts

GPM and NPM?

20

16

12

8

4

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Gains

NPM

GPM

2011 2012 no cuts 2012 w/cuts 2013

Proposed Cuts

Ø Office Functions Ø Supplies

Ø Cell Phone usage

Ø

o o o

Proposed

...

...

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