Accounting – 6.1 Calculation and understanding of accounting ratios | e-Consult
6.1 Calculation and understanding of accounting ratios (1 questions)
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Calculation:
- Gross Profit = Sales Revenue - Cost of Goods Sold
- Gross Profit = £200,000 - £120,000 = £80,000
- Net Profit = Gross Profit - Operating Expenses
- Net Profit = £80,000 - £30,000 = £50,000
- Profit Margin = (Net Profit / Sales Revenue) x 100
- Profit Margin = (£50,000 / £200,000) x 100 = 25%
Answer:
| Gross Profit | £80,000 |
| Profit Margin | 25% |