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Hi John,
I have a problem with question 27.1 in FA Kit. The Net profit % formula is Net profit before interest and tax / Sales, so the Net profit % of Smokey must be (47+5)/305. But in the Answer section, they calculate the Net profit% by dividing 47 by 305. Could you explain that?
Thank you in advance.
Strictly the profit before interest and tax is the net operating profit.
The answer has taken 47 as net profit because it is actually labelled as the net profit in the question. However you would have got the marks had you taken 52 instead.
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