Financial Performance - HELP NEEDED

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torresgbr
torresgbr Registered Posts: 38 Regular contributor ⭐
in AAT Level 4 (Level 8 in Scotland)
Hello
I am due to resit my FP exam on Thursday and am stuck with a question and wondered if anyone could help

I have to calculate the Profit to the nearest £ and Sales Revenue to the nearest £

Net Assets £175,000
Return on Net Assets 13%
Profit Margin 14%
Gearing 32.75%

Profit to the nearest £ - I have calculated 175x13% = £22750 (which is the correct answer)

Sales Revenue - the answer is £162,500 but can't work out how I get to that

Thanks in advance

Karen :thumbup1:

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  • luke1875
    luke1875 Registered Posts: 4 New contributor 🐸
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    Hi Karen

    You have worked out that the profit is £22,750 and from the information that you are given you know the profit margin is 14%

    Gross profit margin is profit over sales revenue.

    22,750
    x 100 = 0.14 or 14%
    Sales

    So if £22,750 is equal to 14%,

    (£22,750 / 14) x 100 = £162,500

    Hope that helps.

  • torresgbr
    torresgbr Registered Posts: 38 Regular contributor ⭐
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    Hi Luke. Yes that is great thank you very much. Thank you for taking the time to help me. Regards Karen

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