Accounting – 6.1 Calculation and understanding of accounting ratios | e-Consult
6.1 Calculation and understanding of accounting ratios (1 questions)
Login to see all questions.
Click on a question to view the answer
Gross Profit Calculation:
Gross Profit = Sales Revenue - Cost of Goods Sold
Gross Profit = £80,000 - £40,000 = £40,000
Gross Profit Margin Calculation:
Gross Profit Margin = (Gross Profit / Sales Revenue) x 100
Gross Profit Margin = (£40,000 / £80,000) x 100 = 50%
Answer: The gross profit for ABC Ltd is £40,000 and the gross profit margin is 50%.