Question

Nimani Ltd. is into the business of back office operations. Honesty and hard work are the two pillars on which the business has been built. It has a good turnover and profits. Encouraged by huge profits, it decided to give the workers bonus equal to two months salary. Following is the Comparative Statement of Profit and Loss of Nimani Ltd. for the years ended 31st March 2013 and 2014.

(a) Calculate Net Profit ratio for the years ending 31st March 2013 and 2014.

(b) Identify any two values which Nimani Ltd. wants to communicate to the society.

$\begin{array}{cccccc}& & & & & \\ \text{Particulars}& \text{Note}& 2012-13& 2013-14& \text{Absolute}& \text{Percentage}\\ & \text{No.}& \left(\text{Rs}\right)& \left(\text{Rs}\right)& \text{Change}& \text{Change}\\ \text{Revenue from Operation}& & 20,00,000& 30,00,000& 10,00,000& 50\\ \text{Less: Employee Benefit expenses}& & 8,00,000& 10,00,000& 2,00,000& 25\\ \text{Profit before Tax}& & \overline{12,00,000}& \overline{20,00,000}& \overline{8,00,000}& \overline{66.67}\\ \text{Tax rate 40}\%& & \underset{–}{4,80,000}& \underset{–}{8,00,000}& \underset{–}{3,20,000}& \underset{–}{66.67}\\ \text{Profit after Tax}& & 7,20,000& 12,00,000& 4,80,000& 66.67\end{array}$

Answer 1

(a) Net Profit Ratio = $\frac{\text{Net Profit}}{\text{Revenue from Operations}}\times 100$

Net Profit Ratio for the year ending 31st March, 2013

= $\frac{\text{Rs}7,20,000}{\text{Rs}20,00,000}\times 100$

= $36\%$

Net Profit Ratio for the year ending 31st March, 2014

= $\frac{\text{Rs}12,00,000}{\text{Rs}30,00,000}\times 100$

=$40\%$

(b)Valued Highlighted :

(i) Social justice;

(ii) Sincerity and Generosity towards employees;

(iii) Fulfilment of Social Responsibility.