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 = £150,000 - £90,000 = £60,000
- Profit Margin = (Gross Profit / Sales Revenue) x 100
- Profit Margin = (£60,000 / £150,000) x 100 = 40%
Answer: The profit margin for ABC Ltd is 40%.