Paper 1 · June 2019 · Financial Statements and Ratios
Using the Charm Packaging Ltd case study figures (combining the existing product and the proposed new product), calculate the company's expected net profit for 2019, in $ millions.
Model answer
8
Also accepted: $8m, 8m, 8 million, $8 million
Explanation
Combined sales of $32m (20+12) less combined cost of goods sold of $19m (13+6) gives a gross profit of $13m; deducting combined expenses of $5m (3+2) leaves a net profit of $8m for 2019.
Derived from ZIMSEC Business_studies Paper 1, June 2019, Q13