Page 284 - F3 -FA Integrated Workbook STUDENT 2018-19

Chapter 20

Profitability

2.1 Gross profit margin: calculation

Gross profit
—————— × 100%

Revenue

2.2 Gross profit margin: reasons for movement

 change in selling prices

 change in sales mix

 change in purchase costs

 change in production costs

2.3 Operating profit margin: calculation

Profit from operations

————————— × 100%
Revenue

2.4 Operating profit margin: reasons for movement

 any factors above that affected gross profit

 changes in administration expenses and/or distribution costs

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