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HERBALIFE
INTERNATIONAL
PHILIPPINES, INC.
Balmores, Cindy C. | 5BSA
I. CURRENT SITUATION
A. Current Performance
All business are concern about maximizing profit. Profit and profitability are different in since profit is simply
revenues minus expenses whereas profitability shows companys ability to earn profits. And this ability is measured
by comparing the profit figure on the scales of net assets and total worth etc. Profitability ratios are shown in Table
18below.
Table 18
Herbalife International Philippines Incorporated
Profitablity Ratio For the Years Ending 2013; 2014 and 2015
To know every peso of sales that eventually ends up into the gross profit margin, the way to do that is to
divide the gross profit by net sales. For three periods the company is able to manage its cost of sales well despite
the consistent decreased in gross profit margin. The reason of declined in gross profit margin is because there is a
low inventory turnover which indicates that the inventory is sitting on hand for longer periods of time. Keeping fewer
inventories on hand for shorter periods can boost the gross profit margin.
The other tool to measure the companys profitability would be the Return On Average Asset Ratio which
shows the percentage of profit in relation to overall assets. Therefore, this ratio judge the earning capacity in using
the assets. The tableshows that the return on asset has an increasing trend the past three years and that the assets
were fully utilized in generating income.
The Return On Equity also increased for three consecutive years which means the company is efficient in
generating profit for shareholders. A return value of 1 indicates that each peso of equity generated profit of 1 peso
also indicating the finacial effectively of management is utilizing the capital for financing growth of business.
B. Strategic Posture
The mission statement of Herbalife Philippines is to change peoples lives by providing the best business
opportunity in direct selling and the best nutrition and weight-management products in the world.
The strategies of Herbalife Philippines is to work closely with its Members to improve the sustainability of the
business they have created to market their products to consumers. These relationships allow the company to identify
and test successful marketing efforts and programs developed by one or more Members and disseminate those
techniques to other Members.