Profit or Loss?

Analysing 1000 UK companies in the Computer Software industry, has revealed that the industry is set to grow at 1% over the next 12 months. Only 37% will actually see sales increase, 36% will see stagnant sales, and 27% are likely to see sales decline. Plimsoll has devised 3 Profit Predictors. to show a company might improve profits over the next 12 months using adopting one of three business plans. Predictor Plans 1. Consolidating -- 262 companies The plan proposed is to reduce sales, overheads and staff to improve profitability. All of these companies need to adopt this emergency plan as they are currently loss making. The potential here is huge as these 262 companies could see margins lifted from average losses of 5.1% to margins of 4.5%. .2. Tweak -- 342 companies Although these 342 companies are doing OK they need a period of stability before considering expanding. Taking a critical look at non-essential costs, margins could improve from 2.5 % to an average of 4.4% giving an overall profit increase of 76%. 3. Expand -- 355 companies 355 companies are well placed. Many have cash to spend yet to move on they must increase sales to improve profits. It's difficult for companies such as these to reduce costs as they already keep costs low. The only way forward is to improve profits. Incorporating this plan, margins will move from a current 10.2% to 9.9%.

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