Page 287 - F3 -FA Integrated Workbook STUDENT 2018-19

Interpretation of financial statements

Example 1 cont.

Solution

20X6 20X5
Gross profit margin

Gross profit/Revenue
(7,300/27,000) 27.0% (6,900/24,000) 28.8%

Operating profit margin
Operating profit/Revenue

(5,000/27,000) 18.5% (5,000/24,000) 20.8%

Asset turnover
Revenue/capital employed

(27,000/ 0.9 times (24,000/ 1.0 times
(19,100 + 11,000)) (16,200+8,000))

Return on capital employed

Operating profit/capital employed
(5,000/ 16.6% (5,000/ 20.7%

(19,100 + 11,000)) (16,200+8,000))

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