You receive the following figures: Sales 85000, Cost of Sales 15000, Rent 5000, Advertising Expenses 7000. Calculate the Net Profit.

Net Profit is the money left over from sales after expenses have been accounted for.First, we need to calculate the Gross Profit. This is Sales - Cost of Sales, so (85000 -15000). Our Gross Profit is £70 000. Next, we move on to calculating the total expenses of the period. Rent + Advertising Expenses are all the given expenses, so (5000 + 7000). The expenses are £12 000. Finally, Net Profit = Gross Profit - Expenses. Therefore, our Net Profit is £70 000 - £12 000 = £58 000.

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Answered by George M. Business Studies tutor

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