# FPFM Financial Performance - AAT Sample Assessment 1 - Task 7b

eddzter1978
Posts:

**6**Registered
Hello All,

Please could someone help me calculate the Sales Revenue to the nearest £ from the following figures:

Net Assets - £175,000

Return on net assets % - 13

Profit margin % - 14

Gearing % - 32.75

Profit - £22,750

Sales revenue - ???

The answer is £162,500 but I cannot find out how to calculate it. I'm sure it is staring me in the face...

Thank you very much in advance.

Ed

Please could someone help me calculate the Sales Revenue to the nearest £ from the following figures:

Net Assets - £175,000

Return on net assets % - 13

Profit margin % - 14

Gearing % - 32.75

Profit - £22,750

Sales revenue - ???

The answer is £162,500 but I cannot find out how to calculate it. I'm sure it is staring me in the face...

Thank you very much in advance.

Ed

## Comments

454RegisteredProfit / Profit Margin = Revenue

£ 22,750 / 0.14 = £ 162,500

6Registered20RegisteredYou can self-check. Profit margin just means how much of the revenue is converted into profit. Consequently, whatever answer you are getting for revenue multiple it by the 14% that should give you the profit, i.e. £22,750, if it doesn't you will know you have made a mistake somewhere.

Revenue(X) * margin (14%) = Profit(£22,750), x=(22,750/14%)

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