Declining Profitability At Berger

Abstract

Profit margin plays an important role to run a business. Profitability is the determination of efficiency. It is the capability of an organization to assemble a gain on an investment relied on its ways in contrast with an unconventional investment. This study explores the identification of problem of an organization and to find out the reasons behind that problem. The purpose of this study is to suggest suitable recommendations to company. The main issue that company is facing is ‘’Declining Profitability’’. Berger Paints profit is declined which is of course not a healthy sign for a company. Profit is declined due to increased expenses, increased cost of goods sold and by using wrong strategies. This study has helped in analyzing the detailed causes behind this lack of profitability and how to sort out such issues. The methodology which is used in this study is ‘’forecasting’’. The main objective of this project is to analyze the financial statements and income statements of a company to differentiate the profit of current year from previous year. By differentiating it is clearly seen that company is now facing loss in the shape of declining profitability. Company has to utilize the available resources at its best and its required rate of return should be more than expected rate of return. Based on the analysis, recommendations are given to Berger Paints to maintain their profit margin and to get maximum benefit. The result of this study is a company has to decrease its expenses and should be refrained from getting more debts