Milly's business yielded a net profit margin of 10.2% in the financial year 20X5.Her expenses were £101 440 and revenue was £447 200.Purchases were £301 100 and closing inventory was £29 770.What was Milly's opening inventory at the beginning of the 20X5 financial year (to the nearest £)?

Question

Quizplus · Accepted Answer

We can use the formula:
Net Profit Margin = (Revenue - Cost of Goods Sold - Expenses) / Revenue
10.2% = (447200 - 301100 - 101440 - Opening Inventory + 29770) / 447200
Solving for Opening Inventory:
Opening Inventory = £28,816. Therefore, the answer is choice C.

Milly's Business Yielded a Net Profit Margin of 10