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Tuesday, March 23, 2021

Income Statement and Profitability Ratios workshet for IB, IGCSE, A Level Business students

 

 Finance and Accounts – Income Statement and Profitability Ratios

Incoment statement worksheet


Neskle Plc ( NP)

The following financial information is taken from the books of Neskle Plc for the year ended 31 March 2020.

Sales revenue $ 45,000

, 

Cost of goods sold $ 12,000

Promotion $ 500

 

Salaries $ 2,500

Repairs and maintenance $ 500

 

Interest $ 400

Tax $ 800

 

Dividends $ 2,000.

 Table 1

 Questions:

 

a)      Define the following terms:

·       Gross profit

·       Net profit

 

 

[4 marks]

b)      Using the  figures given in the  table 1, complete the  Income Statement for the year ending 31 March 2020 for Neskle  Plc.

 

 

[5 marks]

  

Details

$

$

Sales revenue

 

 

Less: Cost of Goods Sold

 

 

Gross Profit

 

 

Less: Expenses

 

 

Salaries

 

 

Repairs and maintenance

 

 

Promotion

 

 

Profit before interest & tax ( PBIT)

 

 

Less: Interest

 

 

Profit After Interest before tax

 

 

Less: Tax

 

 

Profit After Interest & Tax ( PAIT)

 

 

Dividends

 

 

Retained Profit

 

 

 

c)        Using your answers ( question (b), calculate  gross profit margin and net profit margin

·       Gross profit

·       Net profit

 

 

 

[4 marks]

 

Ratios

Working

Answer

Gross Profit margin

 

 

 

 

 

Net Profit Margin

 

 

 

 

 

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