The issue with conventional budgets is that cost of sales is presumed to be fully variable, and management generally expects gross profit margins
to remain stable.
The company, which owns brands such as Five Roses, Bakers, Ellis Brown, Frisco and Willards, had operating profits increased 26,8 per cent to R855m due to the higher gross profit margins
and a controlled increase in selling and administration costs.
Institutional investors say DSC manufacturers are battling with declining gross profit margins
due to increased labor costs, caused by labor shortage and rising raw material prices.
For example, rather than using individual gross profit margins
for each product a company sells, use one overall gross profit margin
for all sales.
expects gross profit margins
to remain about 36 percent to 38 percent, said Steven De Gennaro, vice president for finance.
He tracked slippage in gross profit margins
, noting "brewery operators show very poor trends in gross profit margins
relative to the contract brewers" and said this decline has been accompanied by an even sharper fall in operating income.
Hannah, said, "Our July results were in line with our expectations that demand may continue to soften somewhat but that our gross profit margins
Our truckload gross profit margins
declined due to higher fuel prices and declining truckload rates.
The increase in our Transportation gross profit margin
in the fourth quarter is due to an increase in our truck transportation gross profit margins
and to a change in the mix of services that make up this business line.
We expect solid growth in both gross profit margins
and operating income margins in 2007, reflecting a full year of synergies from the Aircast integration and the positive marginal contribution from our revenue growth.
The margin improvement for the quarter was due to Nightingale's success in increasing its efficiency of service delivery, the reduction of costs related to the operations of recently acquired HealtheNet and IHPS, as well as the benefits the Company realized throughout the quarter from higher software license sales, which inherently carry higher gross profit margins
Gross profit margins
of most companies have an increment from about 6% in 2001 to 20-35% at present.