Problems In Preparation Of Financial Statements Lecture-5 BY AHSAN RIAZ SHEIKH.
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Transcript of Problems In Preparation Of Financial Statements Lecture-5 BY AHSAN RIAZ SHEIKH.
Problems In Preparation Of Financial Statements Lecture-5BYAHSAN RIAZ SHEIKH
Gross Margin Rate
This ratio identify the ratio of gross margin over sales.
Example: 2,90,000 / 6,00,000 * 100 = 48.33%
Gross Profit
Sales 100
Gross Markup Rate
This ratio identify the ratio of gross margin over cost of goods sold.Example: 2,90,000 / 3,10,000 * 100 = 93.5%
Gross Profit
COGS 100
Net Margin Rate
This ratio identify the ratio of gross margin over sales.
Example: 90,000 / 6,00,000 * 100 = 15%
Net Profit
Sales 100
Income Statement Ratios
Expense Ratio
This ratio identify the ratio of gross margin over sales.
Example: 50,000 / 6,00,000 * 100 = 8.33%
Expense
Sales 100
Sales = 8,00,000Markup = 25% of cost Calculate = COGS and Gross profit margin.
COGS = 50,000GP Margin = 25% of sales Calculate = Sales and gross profit margin
Gross profit = 40,000GP Margin = 25% of cost Calculate = Sales and cost of goods sold
Gross profit = 60,000GP Margin = 25% of sales Calculate = Sales and cost of goods sold
Direct Material purchased Rs. 1,00,000Direct Labor 80,000FOH 70,000Increase in material inventory 10,000 Decrease in WIP inventory 5,000 Increase in finish goods inventory 30,000
Prepare cost goods sold statement
Total factory cost ?WIP opening 20,000WIP closing 10,000Finish goods opening 30,000Finis goods closing 50,000Cost of goods sold 1,90,000
Find total factory cost
Opening material inventory Rs. 10,000 Closing material inventory
5,000Direct Labor 30,000 FOH 20,000 Total factory cost 80,000
Calculate the value of purchase (25000)