A firm has Capital of 10,60,000; Sales of 5,00,000; Gross Profit of 2,00,000 and Expenses of 1,00,000. What is the Net Profit Ratio?

20%

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50%

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10%

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40%

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Solution

The correct option is B 20%
Net Profit = Gross Profit - Expenses
= 200000 - 100000
= 100000
Net Profit Ratio = (Net profit ÷ Net sales) x 100
= 100000/500000 * 100
= 20%.

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