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Using the information in Table 2, calculate Greggs’ gross profit - Edexcel - GCSE Business - Question 5 - 2022 - Paper 1
Question 5
Using the information in Table 2, calculate Greggs’ gross profit. Using the information in Table 2, calculate to 2 decimal places, Greggs’ net profit margin. Ana... show full transcript
Worked Solution & Example Answer:Using the information in Table 2, calculate Greggs’ gross profit - Edexcel - GCSE Business - Question 5 - 2022 - Paper 1
Step 1
Using the information in Table 2, calculate Greggs’ gross profit.
Answer
To calculate Greggs' gross profit, we need to subtract the cost of goods sold (COGS) from total revenue.
Assuming that the total revenue is represented by £1,029,347,000 and the COGS is £373,487,000,
the formula is:
Substituting the values:
Therefore, Greggs' gross profit is £655,860,000.
Step 2
Using the information in Table 2, calculate to 2 decimal places, Greggs’ net profit margin.
Answer
To calculate the net profit margin, we need to use the formula:
ext{Net Profit Margin} = rac{ ext{Net Profit}}{ ext{Total Revenue}} imes 100
Assuming the net profit, which is gross profit minus operating expenses, is £82,568,000, we can substitute the values:
ext{Net Profit Margin} = rac{82,568,000}{1,029,347,000} imes 100
Calculating this gives:
ext{Net Profit Margin} = 8.02 ext{%}
Thus, Greggs’ net profit margin is 8.02%.
Step 3
Analyse the impact on Greggs from improving its logistics.
Answer
Improving logistics at Greggs can have multiple positive impacts, including:
Cost Efficiency
Enhancing logistics could reduce transportation and storage costs. This allows for better profit margins and potentially lower prices for consumers.
Customer Satisfaction
An optimized logistics system can lead to faster delivery times and improved product availability, increasing customer satisfaction and loyalty.
Inventory Management
Better logistics can lead to more effective inventory management, reducing waste and the risk of stockouts. This can enhance operational efficiency.
Competitive Advantage
By improving logistics, Greggs can position itself more favorably against competitors, potentially capturing a larger market share.
Overall Profitability
Enhanced efficiency may lead to increased sales and profitability, driven by improved customer experiences and reduced operational costs.