The table shows extracts from the financial statements of a business for 2022. | | 2022 | |------|----------| | Sales | 300,000 | | Cost of goods sold | 200,000 | | Gross profit | 100,000 | | Expenses | 40,000 | What is the net profit ratio for this business in 2022? (Net profit ratio = net profit ÷ sales)

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The table shows extracts from the financial statements of a business for 2022 - HSC - SSCE Business Studies - Question 16 - 2023 - Paper 1

Question 16

The table shows extracts from the financial statements of a business for 2022. | | 2022 | |------|----------| | Sales | 300,000 | | Cost of goods sold | 20... show full transcript

Worked Solution & Example Answer:The table shows extracts from the financial statements of a business for 2022 - HSC - SSCE Business Studies - Question 16 - 2023 - Paper 1

Step 1

Calculate Net Profit

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Answer

To find the net profit, subtract the total expenses from the gross profit.

Net Profit = Gross Profit - Expenses

Net Profit = 100,000 - 40,000 = 60,000

Step 2

Calculate Net Profit Ratio

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Answer

The net profit ratio is calculated by dividing the net profit by the sales and then multiplying by 100 to get a percentage.

Net Profit Ratio = (Net Profit ÷ Sales) × 100

Net Profit Ratio = (60,000 ÷ 300,000) × 100 = 20%

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