Task 7 (I think)

How would you work out sales revenue from the below information.

Inventory holding days- 45 days
Inventory- £252000
Gross profit margin is 20%

Work out
Sales revenue
Cos
Gross profit

I did it one way, hummed and harred and changed it at the last minute. Just wanted to know if what I did was right or wrong!

TIA

Best Answer

Answers

  • Sunflower1o2Sunflower1o2 Registered, Tutor Posts: 8
    Inventory is £252000 and inventory days is 45 - from this information we can calculate the sales figure:- 45 days out of 365 (a full year) so 252000 divided by 45 multiplied by 365 gives £2044000 sales.
    We are given the gross profit margin which is a percentage of sales 20% of £2044000 = £408,800, therefore the cost of sales = £1635200 (80%).
    Let me know if you got the same figures.
  • EmilyRoseEmilyRose AAT Student, AATQB Posts: 11
    Thank you both for your responses. In the exam I first did it how sunflower explained and changed it last minute to Cheesepeasys solution. Fingers crossed it’s correct as there was a lot of other calculations based on the solution of this one.

    Thanks again

    Emily
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