20X3 Vroom Group

	Working	20X3 Vroom Group	Working	20X2 Vroom Co
Gross profit margin	(2300/13450)*100%	17,10%	(2400/12200)*100%	19,67%
Operating profit margin	(730/13450)*100%	5,43%	(940/12200)*100%	7,71%
Return on capital employed (ROCE)	(730/33670)*100%	2,17%	(940/31450)*100%	2,99%

B)Goodwill

Cost of investment 650m+210m =860m

NCI at acqn. 100m*20%*6,8=136m

-(S`Net asset at acqn.) -270m

Goodwill at acqn. 726m
S`s share cap 100m
S`RE at acqn. -80m
FV adjustment 250m
Net asset at acqn.270
C) Comment
When comparing current position of Vroom company there are inconsistency.Because in 20x2 Vroom company asset and liabilities were individual whereas in 20x3 was showed together Vroom and Sleek company asset and liabilities.Thus, there were an inconsistency.fnrjn

In 20x2 Vroom`s revenue and COS were appropriate 12200m and 9800m so that Gross profit margin was19,67% but in 20x3 decrease by 2,57%.That year revenue was increase wherease COS also increase 13,78 % due to Sleek Co was a retained loss -80m and that can be impact decrease gross profit margin .

In 20x2 Vroom`s ROCE percentage was 2,99% and 20x3 it was decrease 2,17% by 0,87%.These numbers depend on operating profits of Vroom and Sleek companies.In 20x2 Vroom`s operating profit margin was 7,71% but 20x2 it was decrease 5,43%.If we glance at these percentages there was a reason acquisition of Sleek company and it`s retained loss.However there was also a reason decrease ROCE and operating profit margins if we will calculate gross profit margin of Sleek company (170m/380m*100%=44,74%) and this result is much higher than Vroom Co operating profit and improve group operating profit margin.Also can be a reason when Vroom Co purchased Sleek Co paid additional value for purchase goodwill (533,6) as well as one of costs was decreased operating profi margin.
Acqusition of Sleek Co wasn`t a reasonable move for Vroom Co.Because when acquisition of Sleek Co all of Vroom group results were decrease.But in the future these percentages may be improve coz Sleek Co invest significant amounts in the battery and self-driving technology and it was confirmed and viable will be completed during early 20X4.That technology can affect group results.

C)COMMENT

Gross profit margin fell by 2,6%(19,67%-17,10%)
Revenue has been increased by 10 %($1250) for the 20x3.Which is mainly due to acquisition of subsidiary as in CSPL subsidiary`s results also included in 20x3.
Sleek Co’s individual financial statements for the period showed revenue of $380m


Operating profit margin fell by 2,3%(7,71%-5,43%)

ROCE also fell by 0,8%