Farah's business yielded a net profit margin of 10.2% in the financial year 20X5.Her expenses were £101 440 and revenue were £447 200. What was Farah's gross profit margin for the 20X5 financial year (to one decimal place)?

Question

Quizplus · Accepted Answer

- Gross Profit Margin = (Revenue - Cost of Goods Sold) / Revenue * 100%
- We are given the net profit margin, which is (Revenue - Expenses) / Revenue * 100%
- To calculate the gross profit margin, we need to add back the expenses to the net profit and then subtract the cost of goods sold from the result
- Cost of Goods Sold = Revenue - Gross Profit
- Gross Profit = Revenue - Cost of Goods Sold
- Expenses = Cost of Goods Sold + Net Profit
- Net Profit = Revenue - Expenses
- Therefore, Gross Profit Margin = (Revenue - (Revenue - Gross Profit)) / Revenue * 100%
- Gross Profit Margin = Gross Profit / Revenue * 100%
- Net Profit Margin = (Revenue - Expenses) / Revenue * 100%
- 10.2% = (447200 - 101440) / 447200 * 100%
- Solving for Gross Profit Margin, we get: Gross Profit Margin = 32.9%

Farah's Business Yielded a Net Profit Margin of 10