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Accounting calculations: profit and percentages
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Accounting uses KS3 maths every day: adding columns, subtracting, and working with percentages. Accuracy matters, because one slip throws out the whole statement.
Gross profit and profit for the year
Gross profit = revenue − cost of sales
(cost of sales is the cost of the goods that were sold)
Profit for the year = gross profit − expenses
(cost of sales is the cost of the goods that were sold)
Profit for the year = gross profit − expenses
Percentages
To express one figure as a percentage of another: part ÷ whole × 100.
Gross profit as a percentage of revenue = 24 000 ÷ 60 000 × 100 = 40%.
To find a percentage of an amount: 25% of £800 = 0.25 × 800 = £200.
Gross profit as a percentage of revenue = 24 000 ÷ 60 000 × 100 = 40%.
To find a percentage of an amount: 25% of £800 = 0.25 × 800 = £200.
Accuracy habits
Line up figures in columns and total them twice.
Show your working and label each figure.
When a percentage is not exact, round to 2 decimal places unless told otherwise, for example 1 ÷ 3 × 100 = 33.33%.
Show your working and label each figure.
When a percentage is not exact, round to 2 decimal places unless told otherwise, for example 1 ÷ 3 × 100 = 33.33%.
Revenue is £48 000, cost of sales is £30 000 and expenses are £11 000. Find the gross profit and the profit for the year.
- Gross profit = 48 000 − 30 000 = £18 000
- Profit for the year = 18 000 − 11 000 = £7 000
Answer: Gross profit £18 000; profit for the year £7 000
Gross profit = revenue − cost of sales. Profit for the year = gross profit − expenses. Percentage = part ÷ whole × 100. Show working and round to 2 decimal places when needed.
The interactive lesson includes the diagrams for this topic.
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