Case Interview Question #00170 Our client Burton Snowboards is a manufacturer of snowboarding equipment and accessories. The company specializes in a product line aimed at snowboarders: snowboards, bindings, boots, outerwear, and accessories, with two distinct major product divisions: boards and clothes. Burton Snowboards has experienced a fall in profitability in recent years. You have been hired to identify the causes for falling profitability. Once that has been completed, the objective is to develop a range of strategic options for the company, which will lead to a return to profit growth.
At the top level, financial performance has changed as follows:
|Total business in year, £ million||2005||2006||2007|
|Profit margin (%)||12.5%||11.1%||4.2%|
Question #1: What information would you require to help explain the change in profitability?