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A summary of HM Co's recent statement of profit or loss is given below: $'000 Revenue 10,123 Cost of sales (7,222) Gross profit 2,901 Expenses (999) Profit before interest and tax 1,902 Interest (1,000) Tax (271) Profit after interest and tax 631 70% of cost of sales and 10% of expenses are variable costs. What is HM Co's operational gearing?

A summary of HM Co's recent statement of profit or loss is given below: $'000 Revenue 10,123 Cost of sales (7,222) Gross profit 2,901 Expenses (999) Profit before interest and tax 1,902 Interest (1,000) Tax (271) Profit after interest and tax 631 70% of cost of sales and 10% of expenses are variable costs. What is HM Co's operational gearing?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A summary of HM Co's recent statement of profit or loss is given below:

$'000

Revenue 10,123

Cost of sales (7,222)

Gross profit 2,901

Expenses (999)

Profit before interest and tax 1,902

Interest (1,000)

Tax (271)

Profit after interest and tax 631

70% of cost of sales and 10% of expenses are variable costs.

What is HM Co's operational gearing?

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