Net profit Ratio - HELP

Paula P
Paula P Registered Posts: 3 New contributor 🐸
in AAT Level 4 (Level 8 in Scotland)
Hi

what is the net profit pecentage?
Profit from operations over revenue of profit before tax over revenue.

as i have the osborne book which states that it profit before tax, however i have noticed in all the past exam papers they use profit from operations.

Comments

  • alicemaylara
    alicemaylara Registered Posts: 259 Dedicated contributor 🦉
    I think its the same thing just under different accounting standards it is named differently.

    Ie you wont see profit before tax and profit from operations in the same income statement
  • Paula P
    Paula P Registered Posts: 3 New contributor 🐸
    Unfortunately you do in DFS paper. The income statement has
    Gross Profit - Expenses = Profit from operation - Finance costs = Profit before tax - tax = profit for the year.
  • Flipflop
    Flipflop Registered Posts: 67 Regular contributor ⭐
    I would probably use final net profit??
  • CelticStar
    CelticStar Registered Posts: 142 Dedicated contributor 🦉
    I wondered this as well Paula because in the Osborne book it is shown as profit before tax (after interest) but in the exam papers I have been doing it is shown as operating profit over revenue. :001_unsure:

    I am doing DFS as well - good luck on Wednesday. :001_smile:
  • Paula P
    Paula P Registered Posts: 3 New contributor 🐸
    I'm so confused and don't know what to do... oh well hopefully it don't come up.

    good luck as well

    i'm also doing PTC & BTC - my brain is over loaded. hehehe:thumbup:
  • CelticStar
    CelticStar Registered Posts: 142 Dedicated contributor 🦉
    I did them last year - they weren't too bad and I kinda wish I was doing them again this year rather than DFS! :lol:
  • Ampsie
    Ampsie Registered Posts: 145 Dedicated contributor 🦉
    Hi,

    I asked my tutor about that because it isn't clear in the osborne books, they actually say that both ratios are used for net profit.
    She said that all the past exam papers seem to use profit from operations/revenue, so that would be the one to go for.
    She also said don't worry just make sure you clearly show your workings for the ratios.

    How is everyone getting on with th IAS standards?
    I still can't get them all into my head so i'm just hoping there aren't too many questions on them!

    Ampsie
    :001_smile:
    Wish wednesday was over!!
  • CelticStar
    CelticStar Registered Posts: 142 Dedicated contributor 🦉
    Thanks for that Ampsie.

    Know what you mean about the standards, there's a only a few questions on them but so much knowledge to learn for those questions.
  • mark130273
    mark130273 Registered Posts: 4,234 Beyond epic contributor 🧙‍♂️
    np is the bottom line figure ?

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