ed by any organization would influence the financial ratios and therefore business objectives would also be reflected in the financial ratios of the organization. For instance, if an organization is expanding its business and trying to improve its profitability then the financial ratios would reflect an improvement in profit margin, operating margin as well as other ratios that are used to measure the productivity and profitability of the company.
Three most important ratios for organizations are operating margin, net profit margin and total assets turnover. CoverGirl Cosmetics is the company selected for this report and as the company is a business unit of Procter and Gamble therefore financial statement of P&G’s beauty division has been used to calculate the financial ratios.
In order to calculate the industry average ratios; two firms have been selected besides CoverGirl Cosmetics and these firms are Revlon and L’oreal. The following table shows the important financial figures required to calculate three