ITPEC IP October 2020 Question 71
ITPEC IP October 2020 — Question 71 of 100
Ordinary profit increased twofold, from 550 million yen to 1,100 million yen. Operating profit is sales minus cost of sales and SG&A: 500 previously and 1,000 currently. Adding non-operating income and subtracting non-operating expenses gives 500 + 160 − 110 = 550 and 1,000 + 150 − 50 = 1,100.
Answer (c)
Why not others:
- gross profit rose from 1,500 to 2,000, an increase of 500
- operating profit increased by 100%, not 50%
- net income rose from 300 to 600 after extraordinary items and taxes
Key rule: Ordinary profit = operating profit + non-operating income − non-operating expenses.
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