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Performance of organisations

jmhjmh Registered Posts: 29
in Management Accounting: Decisions and Control
Hello,
I am really struggling with the below, can someone please explain this to me?

Net Assets - 3,600,000
Return on Net Assets - 12%
Profit Margin - 8%

Calculate: Operating Profit: £
Sales Revenue: £

Thank you.
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Comments

  • CheesypeesyCheesypeesy MAAT Posts: 73
    Operating profit
    Return on Net Assets = Operating profit/Net Assets

    Rearrange to get Operating profit = Net Assets * Return on Net Assets.

    Operating profit = £3,600,000 * 12% = £432,000.

    Sales revenue
    Operating profit margin = Operating profit/Sales Revenue.

    Rearrange to get Sales Revenue = Operating profit/Operating profit margin.

    Sales revenue = £432,000/8% = £5,400,000
    Matthew Dearlove MAAT
    Studying CIMA Operational Level. E1, F1 and P1 passed, studying OCS.
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  • jmhjmh Registered Posts: 29
    thank you for your help with this.
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