Elton is a sole trader. He sells specialist clothing and equipment for sports, including baseball and hockey. It is a niche market. Elton started his business 5 years ago and it has remained small. A wide range of inventory is important. Elton has been looking at the financial performance of his business. The profit margin for 2018 was 35%. An extract of the accounts is shown in the below table.
Revenue and cost information for Elton’s business for 2018 and 2019 ($) |
| 2018 | 2019 |
Revenue ($) | 24,000 | 25,000 |
Cost of sales ($) | 7,200 | Y |
Gross profit ($) | 16,800 | 18,000 |
Expenses ($) | 8,400 | 10,000 |
Profit ($) | X | 8,000 |