Profit Calculations

Extract A Etsy Etsy is an e-commerce business, started in 2005 and based in New York. It is a global online marketplace where people come together to make, sell, buy and collect unique items. Etsy sells a wide variety of handmade products. The range of products includes jewellery, bags, clothing, furniture, toys and art. The handmade products are made by creative people who are trying to turn their hobbies into a business. The products are individual to the person making them and are aimed at niche markets. Etsy does not have a warehouse, just creative people worldwide, selling the products they have made. Etsy connects these creative people directly with customers who are looking for something special. Etsy charges a low fee to those selling their products on the Etsy website. This is lower than the fee charged by eBay and Amazon to sell on their websites. Most customers spend between $15 and $20. Etsy sells a wide range of products but relies on the diversity offered to differentiate itself from the hundreds of available similar sites online. Etsy targets a specific segment of the market by only selling handmade products on its website. Growth of Etsy has led to challenges for sellers who find it difficult to keep up with demand and at the same time maintain a personal touch. Etsy recently changed its terms of business to allow original designs to be made by someone else so that production of items can be increased. However, this has led to the question of whether the items can still be called handmade.

Extract B Third quarter 2020 financial summary for Etsy

Extract B Third quarter 2020 financial summary for Etsy

Using the data in Extract B, calculate the operating profit for Etsy in the third
quarter of 2020. You are advised to show your working.