Question

Buketi provided us with the following information.

Sales	200,000
Mark up	¼
Opening stock	30,000
Closing stock	25,000
Expenses	15,250

Calculate

1. Gross profit
2. Net profit
3. Rate of stock turnover 

Answer 1

Gross profit

Gross profit= Mark-up/Cost of salesx100
Margin=1/4+1=1/5
1/5=x/200,000
Gross profit=40,000
 

Net profit

Net profit=Gross profit-expenses
=40,000-15,250
=24,750
 

Rate of stock turnover

Rate of stock turnover=Cost of sales/Average stock
Cost of sale= Sales-gross profit
=200,000-40,000
=160,000
ROSTO=160,000/average stock
=160,000/27,500
=5.8 times