Q5: Solve any one from the following ( Analysis of Financial statement / Death of Partner)
Calculate the Gross Profit Ratio , Gross profit, Net sales & COGS
Sales ` 5,40,000, Net purchase ` 3,00,000
Sales Return ` 40,000 Closing stock ` 50,000
Opening stock ` 90,000
Answers & Comments
Answer:
COGS = 3,40,000
GP = 1,60,000
Profit margin = 32%
Net sale = 5,00,000
Explanation:
Given:
To find:
Equation used:
Solution:
Calculation of COGS
COGS = Opening stock + Purchase - Closing stock
COGS = 90,000 + 3,00,000 - 50,000
COGS = 3,40,000
Calculation of Gross profit
GP = Sale + Closing stock - Opening stock - Purchase
GP = 5,00,000 + 50,000 - 3,00,000 - 90,000
GP = 1,60,000
Gross profit Margin:
Profit margin = [(Revenue - COGS) ÷ Revenue] × 100
Profit margin = [(5,00,000 - 3,40,000) ÷ 5,00,000] × 100
Profit margin = 1,60,000 ÷ 5,00,000
Profit margin = 0.32 × 100
Profit margin = 32%