The financial statements for the Windy Shield for the past two years appear below:

Calculate the Net Profit Margin for 2020 and 2021 (round to two decimal places)

Windy Shield

Income Statement for the year ended June 30 2020 & 2021

	2020	2021
	$	$
Sales (all credit)	1 600 000	2 200 000
Less Cost of Sales
Opening Stock	100 000	130 000
Plus Purchases	900 000	1 050 000
	1 000 000	1 180 000
Less Closing Stock	130 000	160 000
Cost of Sales	870 000	1 020 000
Gross Profit	730 000	1 180 000
Less Operating Expenses
Selling Expenses	110 000	120 000
Administration Expenses	80 000	90 000
Operating Expenses before Interest	190 000	210 000
Net Profit before Interest	540 000	970 000
Interest Paid	(15 000)	(25 000)
Net Profit after Interest	525 000	945 000

Balance Sheets for the years ended June 30 2020 & 2021

	2020	2021			2020	2021
Assets	$	$		Liabilities	$	$
Current Assets
Cash at Bank	40 000			Bank Overdraft		100 000
Debtors	100 000	220 000		Creditors	50 000	110 000
Stock	130 000	160 000		Total Current Liabilities	50 000	210 000
Total Current Assets	270 000	380 000		Non-Current Liabilities
				Mortgage Loan - The Big Bank	150 000	110 000
Non-Current Assets				Total Liabilities	200 000	320 000
Buildings	500 000	600 000		Owners Equity
Vehicles	100 000	120 000		Paid-Up capital	1 170 000	1 170 000
Shop Equipment	800 000	800 000		Retained Profits	300 000	410 000
Total N.C.A.	1 400 000	1 520 000		Total O.E.	1 470 000	1 580 000
Total Assets	1 670 000	1 900 000		Total Equities	1 670 000	1 900 000

Answer rating: 100% (QA)

Answer CALCULATION OF NET PROFIT MARGIN F... View the full answer