Indexed Totals RPI associated question

westendlad

can somebody pse tell me how you work out the indexed total, when you are given the annual sales figure, the index factor and the RPI

For instance, if the annual sales figure is 1476, the index factor is 195.5/173.4 , how do you get the indexed total to be 1664 ?

visha

When you want to work out the current equivalent sales then you need 3 figures


Past sales Value

Past index value

Current index value

Then divide Past sales by Past index value and multiply by present index value

Therefore £1476 divide by 173.4 times 195.5 equal £1664 equivalent value of sales in today’s term

westendlad

thank you, after a bit of a struggle I got there in the end, and you have confirmed I was right.

westendlad

does anyone know the difference between gross profit percentage and net profit percentage pse ?

Bluewednesday

Gross profit is after sales after cost of sales so the gross profit margin reflects that. Net profit is after all expenses (overheads etc) so the net profit percentage reflects that.

In practice we use it to compare performance year on year. Generally the gross profit doesn't have a radical change - if it does it can mean there is a mistake in the figures.

If the gross profit is roughly the same as the comparative but the net profit percentage is vastly down, it can indicate an unusual rise in overheads and can indicate where to look for variances.

Does that help any?

westendlad

I am doing an exercise which gives the following info :

The gross profit is 743,000

The number of suitcases sold is 201,000

The answer, in the answer sheet is 35.45% - however it states this this is for the year ended December, whereas the figures apply to the year ended June 2006.

Baffling ?????