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SingaporeAccountingQuick questions

Financial Analysis and Ratios

Quick questions on Profitability ratios: N(A)-Level Principles of Accounts

3short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.

What is q1?
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Sales are \40,000andgrossprofitis and gross profit is \16,00016,000. Find the gross profit margin. [2 marks]
What is q2?
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Sales are \60,000andprofitfortheyearis and profit for the year is \9,0009,000. Find the profit margin. [2 marks]
What is q3?
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Explain why the profit margin is always lower than the gross profit margin. [2 marks]

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