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Fellow students please I need your help to clear my mind here. Those who are using the current edition of BPP revision kit. The net profit margin in the question no.17 was calculated using PBIT figure, shouldn’t the net profit figure be the one after interest and tax? My calculation give C as the answer but the book says D. A bit confuse here. Thanks for the help.
Frank.In financial accounting, net profit is indeed after interest and tax.
However, for performance measurement we always look at the net operating profit, which is the profit before interest and tax. (Tax rates are not under the control of the management and we are trying to assess the performance of the management).
Our free lectures will help you – they are a complete course for Paper F9 and cover everything needed to be able to pass the exam well 🙂
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