D2Gross Profit MarginGross profit margin allows us to know the benefit that an organization provides on the cost of its offerings or on the expenses of the products sold. Ultimately, this shows how efficiently the administration uses labor and supplies in the production process. Organizations with high gross margins will have plenty of cash to use for different business operations, for example, research and development or marketing. It is essential to remember that gross profit margins can differ from company to company and from industry to industry. For example, the airline industry has a gross margin of around 5%, while the software industry has a gross margin of around 90%. Anyway, as you can see in Signature company, the gross profit margin was 1.9% lower than the industry average, which is not helpful for the organization and shows that more sales were needed. Additionally, there is not much difference between gross profit and the industry average and it will not negatively influence the company due to its small percentage differences. To improve this, less money must be used for these purchases and stocks. Net Profit Margin Net profit margins are those created from all periods of a business, including taxes. In other words, this ratio opposes net profit and turnover. This comes as close as one might reasonably expect to sum up in a single figure the viability with which the directors run the business: when an organization has a high profit margin, this generally implies that it also enjoys one or more favorable circumstances compared to his rival. Organizations with high net profit margins have a greater cushion to protect themselves during difficult times. Organizations with low profit margins can be wiped out in an economic downturn. What...... middle of paper ......d because they represent an investment with a zero rate of return. This also exposes the organization to problems. Additionally, the inventory turnover rate at Signature was 5 days higher than the industry average, which was terrible for the organization because the inventory was held for a very long time for the organization. Taking everything into account, Signature is off to a good start in business, so more money is coming in. However, the industry average, which puts the organization's liquidity in a terrible situation. They must improve their current profitability to develop their stocks, debtors, bank and cash flow. This shows how efficient management and supplies are in the production process. Yet organizations, for example Signature, which have a high gross margin, will leave a lot of money to be used for different business operations, for example research and development or marketing..