Math Problem Statement
Company A was running at a loss of 2lakhs in FY 2023. This is 10% of the revenue. Next year company wants to gain a profit of 20%, What should be final revenue for nest year?
Solution
To calculate the final revenue for the next year, we can follow these steps:
-
Current Year Loss and Revenue:
In FY 2023, the company had a loss of ₹2,00,000, which represents 10% of the revenue.
Therefore, the revenue in FY 2023 is: -
Profit Target for Next Year:
The company wants to make a profit of 20% in the next year.
This means the company aims to have its revenue cover both the expenses (i.e., last year's revenue since they were running at a 10% loss) and an additional 20% profit on top of that.Let be the required revenue for the next year.
- The expenses will still be ₹20,00,000.
- The desired profit is 20% of this revenue, or .
-
Revenue Equation:
To achieve a profit of 20%, the revenue should cover both the expenses and the profit: -
Solving for :
Rearranging the equation:
Therefore, the company needs a revenue of ₹25,00,000 in the next year to achieve a 20% profit.
Would you like more details on the solution or any specific part? Here are 5 related questions to think about:
- What would be the revenue target if the company wanted a 30% profit instead?
- How would the target change if the company had a larger loss percentage, say 15%?
- What would be the expenses next year if the company achieves its target revenue of ₹25,00,000?
- How can changes in costs impact the required revenue for the desired profit?
- What strategies can a company use to increase revenue to meet profit targets?
Tip: Always ensure to include fixed costs and variable costs when projecting future revenues to meet profit goals.
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Math Problem Analysis
Mathematical Concepts
Algebra
Percentage
Revenue Calculation
Formulas
Revenue = Loss / Percentage Loss
Required Revenue = Expenses + Desired Profit
0.80 * Required Revenue = Expenses
Theorems
-
Suitable Grade Level
Grades 9-12
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