Healthy Foods Ltd is examining the profits made by the business. From the information below, calculate the Gross Profit percentage and Net Profit percentage for 2016. Sales €220,000 Gross Profit €99,000 Net Profit €55,000 Show all workings in the spaces provided. Gross Profit Percentage (i) Workings: ___________ x 100 = 1 Net Profit Percentage (ii) Workings: ___________ x 100 = 1

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Healthy Foods Ltd is examining the profits made by the business - Leaving Cert Business - Question 6 - 2017

Question 6

Healthy Foods Ltd is examining the profits made by the business. From the information below, calculate the Gross Profit percentage and Net Profit percentage for 2016... show full transcript

Worked Solution & Example Answer:Healthy Foods Ltd is examining the profits made by the business - Leaving Cert Business - Question 6 - 2017

Step 1

Gross Profit Percentage

96%

114 rated

Answer

To calculate the Gross Profit Percentage, use the formula:

$Gross\, Profit\, Percentage = \left( \frac{Gross\, Profit}{Sales} \right) \times 100$

Substituting the values:

$Gross\, Profit\, Percentage = \left( \frac{99,000}{220,000} \right) \times 100$

Calculating:

$Gross\, Profit\, Percentage = 0.45 \times 100 = 45\%$

Step 2

Net Profit Percentage

99%

104 rated

Answer

To calculate the Net Profit Percentage, employ the formula:

$Net\, Profit\, Percentage = \left( \frac{Net\, Profit}{Sales} \right) \times 100$

Substituting the values:

$Net\, Profit\, Percentage = \left( \frac{55,000}{220,000} \right) \times 100$

Calculating:

$Net\, Profit\, Percentage = 0.25 \times 100 = 25\%$

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