Profitability Ratio for Aristocrat Leisure Limited

FINANCE

Contents
Introduction........................................................................................................... 2
Profitability ratio.................................................................................................... 2
Net profit ratio.................................................................................................... 2
Gross profit ratio................................................................................................. 3
Operating profit ratio.......................................................................................... 3
Return on equity................................................................................................. 3
Return on total assets........................................................................................ 4
Return on capital employed............................................................................... 4
Conclusion............................................................................................................. 4
References............................................................................................................. 5

Introduction
Aristocrat leisure limited is a listed company and one of the leading companies in providing
the gaming solution. The company has the delivering team of 3500 employees. Its process is
licensed with 240 gaming jurisdiction operating in nearly 90 countries. The company
provides a wide range of products that can include electronic gambling and other casino
management. It is an Australian gambling machine, which has administrative centre in
Sydney. As per this report, the analysis has been conducted on the basis of profitability for
Aristocrat leisure limited and comparing it for Qualys as the competitor for the four years
2014-2018 (Aristocrat leisure limited, 2018).
Profitability ratio
These ratios are prominent in regarding to calculate profitability of the company, which can
help to analyse the performance of the company. These ratios are undertaken to prepare the
all-purpose report for the stakeholders. This category has a range of ratios such as Net profit
ratio, Gross profit ratio, Operating profit ratio, Return on equity, Return on total assets, and
Return on capital employed. These ratios indicate how much amount has been generated in
regards to the total percentage of the revenue of the company (Aristocrat leisure limited,
2018).
Net profit ratio
This ratio signifies the net profit generation in the proportion of revenue of the organisation.
Net profit excludes indirect expenses and taxes. From the data in Appendix, it is seen that
Aristocrat leisure limited is on 10 percent of net profitability in 2015, 16 percent in 2016, 20
percent in 2017, and 15 percent in 2018 (QUALYS, 2017). The ratio shows an increase in the
percentage of the net profitability in each year such as 6 percent increase in profitability as
compared to 2015, 4 percent increased as compared to 2016 but at the same time, the
profitability decreased by 5 percent in 2018. It is seen that the earning an operating margin of