Accounting for Decision Makers - 3

Added on - 18 Dec 2019

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Accounting for Decision Makers
Table of ContentsIntroduction of company..................................................................................................................3B.)...........................................................................................................................................3A.)...........................................................................................................................................9References......................................................................................................................................11
Introduction of companyThe John Lewis partnership is a visionary and successful business. It begins trading in1864 on London Oxford street. Now it grew up and became the largest Omni chain retailer in theUK.Further, John Lewis announced that it will open 10 new stores in another smaller format.Apart from this, some challenges which were faced by John Lewis is related to lack of newtechnology (de Lecea, Cooper and Smit, 2016). For solving this problem firm introduce newtechnology which helps to meet the needs of the customer. Its main aim is to keep its customersatisfied and it focuses on providing excellent services to its customer. Now John Lewis canmeet this challenges and continued to succeed.B.)Ratio of John LewisParticulars2015201420132012Revenue97019027.88465.57758.6Gross profit6426.96008.92825.42592.1Operating profit450.2423.6452.4393.3Net profit143.5101.6151.7136.2Total capital employed1518.81781.71782.71783.7Gross profit ratio66.25%66.56%33.38%33.41%Operating profit ratio4.64%4.69%5.34%5.07%Net profit ratio1.48%1.13%1.79%1.76%% growth in revenue7.46%6.64%9.11%Return on capital employed9.45%5.70%8.51%7.64%Gross profit of John Lewis company is can be determined after deducting the cost whichis associated with making and selling the product. Gross profit of John Lewis company in 2015is 66.25%, in 2014 is 66.56% and in 2012 is 33.41 %. It shows that company gross profitincreases in 2015 and 2016. This means company profit is increasing every year.Operating profit is that profit which company earned by its normal business operation.There is no value cover in any profit earned from the firms' investment. Hence, above table showoperating profit ratio of John Lewis company is decreases in 2014 and 2015 as compare to 2012