stupid question (1 Viewer)

[russianROULETTE]

okay, haven't done finance in ages and i'm having a mental blank. i'm trying to do question 22(b) of the specimen paper (http://www.boardofstudies.nsw.edu.au/syllabus_hsc/pdf_doc/businessstudies_specexam.pdf)

so i was going to do:

gross profit / sales x 100

to get gross profit

COGS = opening stock + purchases - closing stock (am i correct in thinking 'inventories' is closing stock?)

50 000 + 200 000 - 150 000 = 100 000

revenue - COGS = gross profit

1 000 000 - 100 000 = 900 000

gross profit / sales x 100

900 000 / 1 000 000 x 100 = 90%

is this correct, or am i going about it completely the wrong way? (hate finance :angry: )

 

[seano77]

Sounds good to me.. but I agree it doesn't make it very clear what closing stock is. We wont get one as ambiguous tomorrow (hopefully). But your working out is correct I would've done the same.

 

[russianROULETTE]

phew, i was beginning to get worried for a second.

thanks for your help

 

[Prashant Sallan]

wouldn't it be easier to calculate the NPR

since NP= retained earnings therefore

70000/1000000 x 100

=7%