View stunning SlideShares in full-screen with the new iOS app!Introducing SlideShare for AndroidExplore all your favorite topics in the SlideShare appGet the SlideShare app to Save for Later — even offline
View stunning SlideShares in full-screen with the new Android app!View stunning SlideShares in full-screen with the new iOS app!
NoteGP% = NP% + Expenses/Sales%32% = 26.2% + 5.8%Bigger Expenses means smaller NPGP% indicates how well COS being controlledNP% indicates how well Expenses being controlled
3. Minimise! 4. Minimise! Keen purchasing Efficiency Efficient production (people) Economy of Scale (procedures) Sales Cost of Sales Overheads Gross Profit Net Profit2. Maximise!(Good marketing) 1. Ultimate objective is to maximise!
25% SELLING MARK PRICE UP £1-25 MARGIN 20%COST(to us)£1-00 Mark Up = “Gross Profit” as a % of Cost Margin = “Gross Profit” as a % of Selling Price
Answering Ratio Questions in exam1) Write formula2) Do calculation3) Is bigger or smaller better?(If you are comparing ratios…)4) Which ratio is better? Last year’s ratio or this year’s? Company A or company B?5) What may have caused ratio to be good or bad?6) How to improve a poor ratio?7) Can’t make final judgment if industry norms unknown