Need help with terminology for weighted average profit margin
From
Tiffany Price Coley@21:1/5 to
All on Wed Apr 5 08:40:49 2023
Hi, I'm doing an exercise for small businesses to calculate what I think to be average profit % (this term may be incorrect; it's an inherited document and there is no otherwise general information for this).
%Sales Sales Price COGs
80% 100.00
20% 75.00
This last week, a student pointed out an error on a worksheet that we have taught (and used!) so many times that has us stumped. I have attached the sheet, but our basic question is about the proper terminology for the line currently labeled as 'Average
Profit %'. In this exercise, we are asking the students to ADD the items in the last column (weighted profit) and the term 'Average' trips them up. Is this the correct financial term? Is there a better one?
In the next step they take the same number and it is labeled as 'Avg. Profit Margin'. Again, this is a total or added up amount.
Our question is what is the proper financial term? Can we switch this to 'Total Profit %' to eliminate confusion?
In case you want additional content, I am attaching the full exercise to this note.
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