Operating Margin

The operating margin measures how much profit a company makes on a dollar of sales,
after paying for variable costs of production, such as wages and raw materials, but before
paying interest or tax. It is calculated by dividing a company’s operating profit by its net
sales.
Operating Income
Operating Margin Ratio=
𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠

2018 2017 2016 2015 2014

Operating 5,311 4,784 4,066 4,869 5,189
Income
Net Sales 31,122 24,998 23,586 21,757 20,485
Ratio 𝟏𝟕. 𝟎𝟔𝟓𝟏% 𝟏𝟗. 𝟏𝟑𝟕𝟓% 𝟏𝟕. 𝟐𝟑𝟗𝟎% 𝟐𝟐. 𝟑𝟕𝟗𝟎% 𝟐𝟓. 𝟑𝟑𝟎𝟕%
The Operating Margin Ratio of RCBC has been changing drastically over the
years. The highest ratio recorded was on 2014 and the lowest was on 2018. This means
that RCBC was able to pay their debts on 2014 with the highest percentage and was able
to compete best with their competitors.

Profit Margin
The net profit margin is equal to how much net income or profit is generated as a
percentage of revenue. Net profit margin is the ratio of net profits to revenues for a
company or business segment. Net profit margin is typically expressed as a percentage
but can also be represented in decimal form. The net profit margin illustrates how much
of each dollar in revenue collected by a company translates into profit.
Net Income
Profit Margin Ratio=
𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠

2018 2017 2016 2015 2014

Net Income 4,320 4,308 3,868 4,187 3,969
Net Sales 31,122 24,998 23,586 21,757 20,485
Ratio 𝟏𝟑. 𝟖𝟖𝟎𝟗% 𝟏𝟕. 𝟐𝟑𝟑𝟒% 𝟏𝟔. 𝟑𝟗𝟗𝟔% 𝟏𝟗. 𝟐𝟒𝟒𝟒% 𝟏𝟗. 𝟑𝟕𝟓𝟐%
The Profit Margin Ratio of RCBC was the highest on 2014 and was the lowest on
2018. This means that RCBC return on their profit was the highest after paying all their
obligations last 2014. Their lowest return was on 2018 which means that their sales may
have been the highest during 2018, but their debts to pay was also high which resulted
to a lower profit margin ratio.
Return on Assets
Return on assets (ROA) is an indicator of how profitable a company is relative to its total
assets. ROA gives a manager, investor, or analyst an idea as to how efficient a company's
management is at using its assets to generate earnings. Return on assets is displayed as
a percentage.
Net Income
Return on Assets=
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠

2018 2017 2016 2015 2014

Net Income 4,320 4,308 3,868 4,187 3,969
Average 644,595 553,988 521,193 516,061 457,905
Total Assets
Ratio 𝟎. 𝟔𝟕𝟎𝟐% 𝟎. 𝟕𝟕𝟕𝟔% 𝟎. 𝟕𝟒𝟐𝟏% 𝟎. 𝟖𝟏𝟏𝟑% 𝟎. 𝟖𝟔𝟔𝟖%
The Return on Assets of RCBC was the highest last 2014 and lowest on 2018.
This means that the return on asset of RCBC was the highest on 2014 and that they were
also able to efficiently manage their assets to produce during a period. Year 2018 was
the least profitable for RCBC since their return on asset was the lowest.

Kenton, W. (2019, July 13). Operating Margin Definition. Investopedia. Retrieved from
https://www.investopedia.com/terms/o/operatingmargin.asp

Murphy, C.B. (2019, June 25). Net Profit Margin. Investopedia. Retrieved from
https://www.investopedia.com/terms/n/net_margin.asp

Hargrave, M. (2019, July 3). Return on Assets- ROA. Investopedia. Retrieved from
https://www.investopedia.com/terms/r/returnonassets.asp