Question

Question 3   Fatma Limited

                                                                                                                                                           

Given below is a summary of a business’s performance for the first three months:

	Jan	Feb	Mar
	AED000	AED000	AED000
Revenue	400	480	450
Cost of Sales	210	270	260
Expenses	140	144	141
Interest	-	-	-
Shareholders Funds	240	290	319
Loan	-	-	-

Required

For each month of the year, complete the table to calculate the following performance indicators:

1. Gross profit margin Ration ( Answer in Details and Percentage for each month )
2. Operating profit margin( Answer in Details and Percentage for each month )

Required	Jan	Feb	Mar
A-Gross profit margin Ratio
B- Net profit margin Ratio

Note: Answers in Word format - Kindly Fill the table with an explanation of the result of each ratio for each month

Answer 1

solution:
A) CALCULATION OF GROSS PROFIT RATIO:
		jan	feb	mar
revenues		400	480	450
less: cost of sales	210	270	260
gross profit	190	210	190
gross profit ratio	47.50%	43.75%	42.22%
gross profit ratio = gross profit / sales*100
B) CALCULATION OF NET PROFIT MARGIN RATIO:
		jan	feb	mar
gross profit	190	210	190
less: expenses	140	144	141
net profit		50	66	49
net profit ratio	12.50%	13.75%	10.89%
net profit ratio = net profit / sales * 100