Videos: Definitions, Ratios and Proportions

1. To run a lemonade stand, Charlie and Sam spent $20 building a booth, and $100 on lemons and sugar. If they brought in $300 in Sales, find their Costs, Net Profit and Gross Profit.

2. Detailed information about Minute Maid Lemonade company is supplied below:

Income Statement

Sales $20,000,000

– COGS 12,000,000

= Gross Profit 8,000,000

– Operating expenses 5,000,000

= Net Profit 3,000,000

Create a common size income statement (express each line as a percent of sales.)

Find the Percent Net Margin for both Charlie and Sam’s lemonade stand, and for Minute Maid. Which company had higher Profit Margins?

3. Sarah likes to keep the investments in her RRSP in a ratio of 1:3:2 in Cash, Bonds, and Stocks. Last year she invested $12,000 in total.

   	%	Initial	%change	Interest	Today	New Total	Difference
   CASH			+3%
   BONDS			+8%
   STOCKS			-2%
   TOTAL		$12,000	–

    

   (a) How did she invest her initial $12,000?

   (b) Over the year, her cash investments rose by 3%, her Bonds by 8%, and her stocks lowered by 2%. What was her profit or loss over the year?

   (c) This year, Sarah has another $2540 to invest. How should she invest her money so that the ratio of total investments returns to 1:3:2?

Chapter Attribution

Video chapter in Business Mathematics by Chris Kellman, Leslie Major, Don Mallory, Frank Gruen, and Amy Goldlist shared under a CC BY-NC license.