Write down the formulas for: Figure 1: Sales revenue between January and April

£70,000
£60,000
Gross profit Sales revenue − cost of sales £60,000
£50,000 £45,000
gross profit

Sales revenue (£)

Gross profit margin ×100 £40,000
sales revenue £30,000
£35,000
£30,000
Net profit Gross profit − other operating expenses and interest
£20,000
net profit £10,000
Net profit margin ×100
sales revenue £0
Average annual profit January February March April
Average rate of return × 100
cost of investment Using the information in Figure 1, calculate the average sales revenue for the four months between January and April
£

margin
Average
calculations
rate of return calculations Figure 2: Average number of items sold in a day
Example 1: Example 1:
Sales revenue £300,000.00 Average annual profit £100,000
Cost of sales £210,000.00 Cost of new machine £400,000 145

Gross profit £90,000.00 Average rate of return 25% 185

Gross profit margin (2 dp) 30.00% Example 2:
Other operating expenses and interest £15,000.00 Total profit over 5 years £500,000
Net profit £75,000.00 Cost of new machine £50,000
Net profit margin (2 dp) 25.00% Average rate of return 200%
65
Example 2: Example 3:
Sales revenue £30,560,692.00 Total profit over 3 years £27,000 Novels Magazines Atlases

Cost of sales £8,370,307.00 Cost of new machine £6,000

Figure 3: Average price paid for each type of item
Gross profit £22,190,385.00 Average rate of return 150%
£15.00 £13.80
Gross profit margin (2 dp) 72.61% Example 4:
£12.50
Other operating expenses and interest £25,044,662.00 Total profit over 2 years £90,000
£10.00 £8.20
Net profit £-2,854,277.00 Cost of new machine £100,000
£7.50
Net profit margin (2 dp) -9.34% Average rate of return 45% £4.80
£5.00
Example 3: Example 5:
£2.50
Sales revenue £2,000,000.00 Total profit over 1 year £90,000
£0.00
Cost of sales £900,000.00 Cost of new machine £90,000
Novels Magazines Atlases
Gross profit £1,100,000.00 Average rate of return 100%
Using the information in Figures 2 and 3, calculate the
Gross profit margin (2 dp) 55.00% Example 6:
average daily sales revenue generated from magazines.
Other operating expenses and interest £300,000.00 Total profit over 2 years £500,000
Net profit £800,000.00 Cost of new machine £500,000 £
Net profit margin (2 dp) 40.00% Average rate of return 50%

Cross out the appropriate More / Less helpful for each of these qualities of financial data:
Topic 2.4 Making financial decisions
Topic 2.4 Making financial decisions