Based on the benchmarking analysis below, what is a logical conclusion to draw about the margin profile
Question:
- Based on the benchmarking analysis below, what is a logical conclusion to draw about the margin profile of the target company?
HISTORICAL
2020 2021 2022
Gross Margin % 67.4% 67.9% 68.3%
Private Peer 66.5% 67.3% 66.8%
Private Company target 64.6% 65.1% 65.5%
Total SG&A of Sales
Public Peer 45.1% 44.5% 43.6%
Private Peer 47.0% 45.5% 45.1%
Private Company Target 45.2% 46.5% 47.1%
There is room for operational improvement across the board
A) There is no room for margin improvement
B) There is room for gross margin improvement only
C) There is room for SG&A margin improvement only
D) The target has unsustainably high margins
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford