Help with working out Net Profit Margin.

Hello,

I am doing mocks for my exam, can you help me work out the net profit margin from the data below. If you can, can you also show me how you did it. I will appreciate any help. Thanks in Advance.

Capital 400,000
Sales 450,000
Trade Creditors (payables) 40,000

Discount allowed 1,800
Purchases 200,000
Drawings 37.990
Rent, Rates and insurance 40,000
Heating and Lighting 20,000
Postage and Stationery 4,000
Advertising 7,000
Salaries and wages 70,000
Bad Debts 1,600
Cash in hand 2,000
Cash at Bank 10,000
Stock (Inventory) at 1st May 2015 31,000
Trade Debtors (Receivables) 56,000
Loan 16,000




Closing inventory 33,000

Comments

  • Enterprise_Warrior
    Enterprise_Warrior Yorkshire & HumberFMAAT, AAT Licensed Accountant Posts: 78

    + Sales 450,000

    - Discount allowed 1,800
    - Purchases 200,000
    - Rent, Rates and insurance 40,000
    - Heating and Lighting 20,000
    - Postage and Stationery 4,000
    - Advertising 7,000
    - Salaries and wages 70,000
    - Bad Debts 1,600

    Total Costs = £344,400

    Profit is £450,000 - £344,400 = £105,600

    Margin is £105,600 / £450,000 = 23.47%

    The missing items are balance sheet items and do not contribute to profit margin.
    FMAAT, AAT Licensed Accountant and CIMA finalist
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