Ratio Q

[naved_s9994]

How detailed do our answers need to be?

Lets say: Like a past exam;           Q. How does NPR decrease?

Is this sufficient?     Sales increase to a greater extent then NP's decrease, leading to a decrease.


OR

Is this sufficient?    The Cost of sales increased to a greater extent than sales, hence leading to a decrease in NP, thus implicating
                           the effect on NPR.


What do you guys reckon?


I know the first one is much more basic, but it does answer the question...

[eeps]

I'd say how detailed your response needs to be, depends on how many marks have been allocated to the question. E.G. if it's a 2 mark question, then you would need to identify and explain 2 points in relation the question. In response to your question "How does NPR decrease?" I would go something along the lines of...

"NPR, which is Net Profit over Sales, may decrease due to worse expense control, items such as Cost of Sales and Stock Loss may have contributed to the decrease in Net Profit Ratio. Another factor/reason why NPR decreased was that Sales increased proportionally more than Net Profit's decrease. This led to an overall decrease in the Net Profit Ratio."

I think it's generally good to give an example or two in a question like that, to show the marker you understand what you're talking about.

I think with your 2 responses, you could combine the two into one response depending the how much the question is worth. If it was only a one mark question yes, you should expand on your first response. I think in most theory questions, you should write in detail (answer the question fully, leaving no doubt in the exam marker's mind) to make sure you gain full marks.

[naved_s9994]

Thanks mate. Appreciated

[eeps]

Thanks mate. Appreciated

No probs!