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

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Question 6

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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%

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Answer

To calculate the Gross Profit Percentage, use the formula:

extGrossProfitPercentage=(Gross ProfitSales)×100 ext{Gross Profit Percentage} = \left( \frac{\text{Gross Profit}}{\text{Sales}} \right) \times 100

Substituting the given values:

Gross Profit Percentage=(99,000220,000)×100=45%\text{Gross Profit Percentage} = \left( \frac{99,000}{220,000} \right) \times 100 = 45\%

Thus, the answer is: 45%

Step 2

Net Profit Percentage

99%

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Answer

To calculate the Net Profit Percentage, apply a similar formula:

Net Profit Percentage=(Net ProfitSales)×100\text{Net Profit Percentage} = \left( \frac{\text{Net Profit}}{\text{Sales}} \right) \times 100

Inserting the relevant values:

Net Profit Percentage=(55,000220,000)×100=25%\text{Net Profit Percentage} = \left( \frac{55,000}{220,000} \right) \times 100 = 25\%

Therefore, the answer is: 25%

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