Rahatur Rouf
Unit 5 – M2, D2
For this merit task, I will be analysing the statistics that I have calculated for P5 and explain the
relation of this figure to City Westminster College (CWC). After that, I will be making
recommendations that could be applied to CWC to reduce the amount of money leaving. So that the
college has the most money in the bank to spend on other things like school improvements to create
a better-quality learning environment for the students. Rather than having to pay back loans.
Gross Profit Percentage (GPP)
From the P5 task, we can see that the GPP for CWC is 58%. What this shows us in that for every sale
CWC make, they would have 58% of Gross Profit left, after subduction of the expenses. For example,
if CWC makes a sale of a course for £100, it would mean they would have £58 of Gross Profit left, and
£42 would be the cost they faced to run the cost. The cost could have been to a few variables such as
wages, the internet, resources, along with other aspects. For the stats for GPP, I am not sure if CWC
made a profit in this. Whereas, if the course cost CWC 50% of the price they sell it for, then I can say
that they have made and profit of 8%. From the Industry Average of the GPP, we can see that it is at
the percentage of 39%. Comparing this figure to CWC, we can see that the GPP is much higher than
the average of the industry they are set in. having a higher GPP than the average is a good thing, as
CWC are making the most money out of their sales. Since CWC are already doing well, there is not
much I can recommend for them to improve. Whereas, I can recommend what they can do to
increase their GPP and reduce their expenses. A recommendation I can make is that CWC can look
for suppliers that sell them resources they need for a cheaper price or negotiate with their current to
reduce the price so that CWC can make the most out of their sales. Another recommendation I can
give is that CWC can sell their courses for a higher price that people can still afford, again trying to
make to most money out of the sales.
Net Profit Percentage (NPP)
After calculating the NPP, we can see that the NPP is 19.36%. This shows us that for a sale CWC make,
19.36% would be left as Net Profit. For example, a £100 sale would leave CWC £19.36 of net profit
after expenses have be taken off. The figures also show that the staff earn £67,200 per annum. What
CWC can do the make their net profit higher is by reducing the wages of the staff at the college. this
could potentially increase the percentage of the net profit. On the table, we can also see that the
industry average is at the percentage of 30%. This shows us that CWC is well below the average and
are not receiving the most amount of profit. A recommendation I would give CWC to increase their
net profit is to reduce the annual salary of staff, so that their costs are reduced and their NPP can
increase and get closer to the industry average. Another recommendation I would give CWC is for
them to check other expenses for the college that are expensive. It could be that their supplier is a
very expensive supplier, what CWC could do is negotiate with them to reduce the price of the
supplies they buy, so that CWC can make the most profit and get to the industry average of their NPP.
Return of Capital Employed (ROCE)
The ROCE for CWC is at the percentage of 57.63%. this means that for every £1 that CWC make, they
would have 57p would be their return in relation to net profit. Keeping the ROCE at a high
percentage, CWC will need to make sure that their returns are coming in from low interest rates and
tax. The industry average of ROCE is at the percentage of 37%. Comparing the ROCE of CWC to the
average, we can see that CWC is in a good position and are at a higher percentage than the average. I
will not be able to recommend much as but to say that they should try and keep their expenses low.
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Unit 5 – M2, D2
For this merit task, I will be analysing the statistics that I have calculated for P5 and explain the
relation of this figure to City Westminster College (CWC). After that, I will be making
recommendations that could be applied to CWC to reduce the amount of money leaving. So that the
college has the most money in the bank to spend on other things like school improvements to create
a better-quality learning environment for the students. Rather than having to pay back loans.
Gross Profit Percentage (GPP)
From the P5 task, we can see that the GPP for CWC is 58%. What this shows us in that for every sale
CWC make, they would have 58% of Gross Profit left, after subduction of the expenses. For example,
if CWC makes a sale of a course for £100, it would mean they would have £58 of Gross Profit left, and
£42 would be the cost they faced to run the cost. The cost could have been to a few variables such as
wages, the internet, resources, along with other aspects. For the stats for GPP, I am not sure if CWC
made a profit in this. Whereas, if the course cost CWC 50% of the price they sell it for, then I can say
that they have made and profit of 8%. From the Industry Average of the GPP, we can see that it is at
the percentage of 39%. Comparing this figure to CWC, we can see that the GPP is much higher than
the average of the industry they are set in. having a higher GPP than the average is a good thing, as
CWC are making the most money out of their sales. Since CWC are already doing well, there is not
much I can recommend for them to improve. Whereas, I can recommend what they can do to
increase their GPP and reduce their expenses. A recommendation I can make is that CWC can look
for suppliers that sell them resources they need for a cheaper price or negotiate with their current to
reduce the price so that CWC can make the most out of their sales. Another recommendation I can
give is that CWC can sell their courses for a higher price that people can still afford, again trying to
make to most money out of the sales.
Net Profit Percentage (NPP)
After calculating the NPP, we can see that the NPP is 19.36%. This shows us that for a sale CWC make,
19.36% would be left as Net Profit. For example, a £100 sale would leave CWC £19.36 of net profit
after expenses have be taken off. The figures also show that the staff earn £67,200 per annum. What
CWC can do the make their net profit higher is by reducing the wages of the staff at the college. this
could potentially increase the percentage of the net profit. On the table, we can also see that the
industry average is at the percentage of 30%. This shows us that CWC is well below the average and
are not receiving the most amount of profit. A recommendation I would give CWC to increase their
net profit is to reduce the annual salary of staff, so that their costs are reduced and their NPP can
increase and get closer to the industry average. Another recommendation I would give CWC is for
them to check other expenses for the college that are expensive. It could be that their supplier is a
very expensive supplier, what CWC could do is negotiate with them to reduce the price of the
supplies they buy, so that CWC can make the most profit and get to the industry average of their NPP.
Return of Capital Employed (ROCE)
The ROCE for CWC is at the percentage of 57.63%. this means that for every £1 that CWC make, they
would have 57p would be their return in relation to net profit. Keeping the ROCE at a high
percentage, CWC will need to make sure that their returns are coming in from low interest rates and
tax. The industry average of ROCE is at the percentage of 37%. Comparing the ROCE of CWC to the
average, we can see that CWC is in a good position and are at a higher percentage than the average. I
will not be able to recommend much as but to say that they should try and keep their expenses low.
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