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Question
Calculate following Operating Profit ratio from the following information:
Current Assets Rs.35,000
Stock Rs.15,000
Operating Expenses Rs.20,000
Sales Rs.60,000
Cost of Goods Sold Rs.30,000
Current Assets Rs.35,000
Stock Rs.15,000
Operating Expenses Rs.20,000
Sales Rs.60,000
Cost of Goods Sold Rs.30,000
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Solution
The correct option is C 16.67
Operating profit ratio of a company can be determined by comparing operating profit with the net sales. It shows the end of the management in running the business. It is calculated as:Operating Profit ratio = (Operating Profit/ Net Sales)x 100 = (Sales - operating expenses - cost of goods sold/ Net Sales) x 100 = (60,000-20,000-30,000/60,000)x100 = (10,000/60,000)x100 = 16.67%
Operating profit ratio of a company can be determined by comparing operating profit with the net sales. It shows the end of the management in running the business. It is calculated as:
Operating Profit ratio = (Operating Profit/ Net Sales)x 100
= (Sales - operating expenses - cost of goods sold/ Net
Sales) x 100
= (60,000-20,000-30,000/60,000)x100
= (10,000/60,000)x100 = 16.67%
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