Profitability Ratio

1. Gross Profit Ratio

The Gross Profit Ratio shows the percentage of revenue a company keeps
after it covers all direct cost associated with running the business.
A higher gross profit margin means, company has more cash to pay for
indirect and other costs.
A Gross Profit Margin of 65% is considered healthy.
 FMCG Industry We can see HUL had posted a GP margin of
54.6% in 2018 but then it decreased to 53.8% in the subsequent
year 2019 and then increased its margin to 55%. Overall, HUL
remained below the healthy margin of GP. In ITC we can see a GP
margin of 66% in 2018 which is a healthy ratio but again it
declines in 2019 to 64.1% and again increases to 65.4% in 2020.
Overall, it has a relatively good GP margin as compared to other
companies in the same industry. Nestle has been in declining trend
in 2018 it had a GP ratio of 60.3% which decreased to 58.6% &
56.00% in 2019 & 2020 respectively. Britannia had the poorest GP
margin as its ratio stood at 39.5%, 41.2% & 41.2% in 2018, 2019
& 2020 respectively. Britannia GP margin has been stagnant for 3
years on which I did my research.