## Finding Missing information using Accounting Ratios

### If Gross Profit is expressed as a percentage of the cost price. In order words, Mark up is given.

Mark up = Gross Profit/Cost price

### Example

Calculate the Gross profit if the Sales = \$54,000, Mark up is 20%.
Goods costing \$100 has been sold at \$120.
If sales are \$54000 then the Gross Profit = 20/120 * 54,000= \$9000

### If Gross Profit is expressed as a percentage of selling price i.e. Gross profit margin.

Gross profit margin = Gross profit/ Selling price

If Stock turnover ratio is stated
Stock turnover is the rate at which the stock of goods is sold.
Stock turnover= Cost of goods sold/ Average stock

### Example

Cost of goods sold= \$3000
Opening Stock= \$400
Closing Stock = \$600

#### 2

Therefore, Stock turnover = \$3000/\$500 = 6 times per year or 2 months

### New Youtube Channel - ThinkIGCSE

Hi Everyone, I have launched a new YouTube channel with more than a 100 videos on  Economics and Business Studies, tailored specifically for IGCSE and A Level and IBDP students.

#### WHO'S ONLINE

We have 338 guests and no members online

### IMPORTANT MESSAGE

Quizzes and worksheets on this website have been developed in Flash format. Flash is no more supported by browsers. Therefore, you might see blank pages on some instances. Install Flash player plugin for Chrome from Chrome Web Store. Click here

Similarly, for other web browsers you will have to activate the relevant flash player plugins.

Save