dec 04 pev past paper

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:25AM in AAT student discussion
could somebody help me out, i dont how they got the answers for gross profit margin, operating profit margin, return on capital employed and the labour capacity ratio, could somebody help me out with this as im struggling with section 2.

Thanks

Ste

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:dec 04 pev past paper

    Hi

    GP margin is gross profit/turnover x 100
    OP margin is operating profit/turnover x 100
    ROCE is operating profit/net assets x 100
    Labour capacity is budgeted labour hours/capacity labour hours of the factory. i.e the number of hours they would like the factory to work/the number of the hours the factory can actually work.

    I hope this helps
    Eva
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:dec 04 pev past paper

    im still struggling with dec 04 pev past paper, they get 2.2 for stock turnover in months for factory a & b and they get 1.0 for age of debtors in months for both factories, could somebody help me out with this.

    Many Thanks

    Ste
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:dec 04 pev past paper

    You can work out stock turnover by using cost of sales or purchases as a basis.

    Stock turnover = Stock/purchases or cost of sales x 12

    A = 120/660 X12 = 2.2 b =142/784 X 12

    On both of the above they have used materials as the basis (purchases)

    Debtors turnover = Debtors/Turnover x12

    A = 183/2200 x12 =0.99 (round up to 1 month)

    B = 238/2850 x 12 = 1 Month

    If you are required to calculate in days then replace x 12 with x 365.

    Hope this helps

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