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June 2015 ratio analysis questions

This topic has 1 reply, 2 voices, and was last updated 7 years ago by MikeLittle.

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August 22, 2017 at 8:20 pm #403066
mdhashim
Member
- Topics: 39
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Hello Mike ,
Mike I didn’t get the logic behind calculating the operating profit margin for the year 20X5.like when you divide operating profit for that year ie 4700with revenue 36000 you get 13.05,but the answer in there is 10 .3%.please help me with this Mike
Thank you in advance
August 22, 2017 at 9:57 pm #403075
MikeLittle
Keymaster
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We need to take out the profit gained from the sale of the division
Reported profits before tax are $4,300
Profits before interest and tax are $4,700
Take out the gain on the disposal and adjusted pbit is $3,700
$3,700/$36,000 = 10.28%
Is that better?
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