In its 20X3 financial year Tee Limited made a gross profit margin of 23.5% on revenue of £1 800 200.Its closest rival, Dee Limited, made a gross profit margin of 24.7% in the same period.By what percentage (to one decimal place) would the revenue of Tee Limited need to increase in order to make the same gross profit margin as Dee Limited, assuming that the cost of sales figure remains exactly the same?

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Quizplus · Accepted Answer

To match Dee Limited's gross profit margin of 24.7%, Tee Limited needs to increase its revenue such that its gross profit margin equals 24.7%, with the cost of sales remaining constant. The formula for gross profit margin is (Revenue - Cost of Sales) / Revenue. Since the cost of sales remains the same, the increase in revenue will directly affect the gross profit margin. The calculation involves finding the required increase in revenue to shift the gross profit margin from 23.5% to 24.7%. The percentage increase needed is relatively small, and when calculated accurately, it results in a 1.6% increase in revenue for Tee Limited to achieve the same gross profit margin as Dee Limited.

In Its 20X3 Financial Year Tee Limited Made a Gross