2019 2018 Change Net Sales 25,137.1 21,292.5 18.1% Cost of Net Sales (12,036.9) (9,858.0) 22.1% Gross...

	2019	2018	Change
Net Sales	25,137.1	21,292.5	18.1%
Cost of Net Sales	(12,036.9)	(9,858.0)	22.1%
Gross Profit	13,100.2	11,434.5	12.7%
Administrative expenses	(779.8)	(673.4)	15.8%
Selling and marketing expenses	(1,555.2)	(1,626.7)	(4.4%)
Net impairment loses on financial and contract assets	(338.9)	(346.4)	(2.2%)
Other (Income) Expenses	(5,046.6)	(4,288.0)	17.7%
Operating Profit	5,379.9	4,500.0	19.6%
Interest Expense	(1,727.7)	(1,687.0)	2.4%
Income Before Income Taxes	3,652.2	2,813.0	22.9%
Provision of Income Taxes	(346.6)	(140.1)	147.4%
Net Income Including Noncontrolling Interests	3,305.6	2,672.9	19.1%
Less: Net income to Noncontrolling Interests	(30.2)	(156.3)	(80.7%)
Net Income Attrributable to Company	3,275.4	2,516.6	23.1%
Less: Income Tax Expense	(785.6)	(495.5)	58.5%
Less: Dıscontinued Operations	772.4	-	n.a.
Net Income	3,262.2	2,021.2	60.6%

can you specify your opinion as a financial analyst about the company's financial position?

Expert Solution

The company net sales have increased by 18.1% from previous years. The sales growth in the range of 15% to 20% is said to be quite a good growth depending at what stage the company is in its business. The gross profit margin in 2018 was 53.7% where as in 2019 it was 52.12%, it is slightly lower than the 2018 but gross profit margin of more than 50% shows that company has good control over the market and it has the ability to influence the price without significantly affecting the sales. It seems that a significant portion of the company cost after cost of sales is towards the selling and marketing expenses. Its interest expense in the current year has increased that means the company has taken more debt. The company net profit margin for 2018 was 9.49% and in 2019 it was 12.98%, its net profit margin has increased however this increase can be attributed to the discontinued operation. One thing to note here is that even though the company has more than 50% gross margin its net profit margin is significant low which shows that the indirect cost of sales is quite high.

jeff jeffy answered 1 year ago

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