Profit percentages
In this lesson, you'll learn how to use profit percentages—margin and mark-up—to identify missing financial information in exam questions. Margin expresses profit as a percentage of sales, while mark-up expresses it as a percentage of cost.
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In this lesson
- 0:00 Profit percentages and missing information
- 0:24 Gross profit margin vs mark-up explained
- 1:10 Calculating gross profit margin worked example
- 1:47 Mark-up calculation and application
- 2:21 Using percentages to find inventory figures
- 2:57 Finding missing inventory with mark-up method
- 4:58 Accounting for lost or destroyed inventory
- 6:04 Lost inventory with insurance coverage
About this lesson
Understanding the difference is crucial because exam questions often give you one percentage and ask you to work backwards to find missing figures like closing inventory, cost of sales, or total sales. You'll see how to apply these techniques step-by-step through worked examples, including how to handle special scenarios like lost or damaged inventory and the correct accounting treatment depending on insurance coverage. This skill is essential for Financial Accounting and Management Accounting papers, where you'll frequently need to reconstruct financial statements from incomplete information.
Duration: 8m
Transcript
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