Question

Operating Cost ₹ 3,40,000; Gross Profit Ratio 20%; Operating Expenses ₹ 20,000. Calculate Operating Profit Ratio.

Answer 1

$\begin{array}{l}\text{Cost of Revenue from Operations}=\text{Operating Cost}-\text{Operating Expenses}\\ =\text{3,40,000-20,000}=\text{Rs 3,20,000}\\ \text{Gross Profit =}\frac{3,20,000\times 20}{80}=\text{Rs 80,000}\\ \text{Revenue from Operations}=\text{Cost of Revenue from Operations + Gross Profit}\\ \text{=3,20,000+80,000}=\text{Rs 4,00,000}\\ \text{Operating Profit}=\text{Revenue from Operations - Operating Cost}\\ =4,00,000-3,40,000=\text{Rs 60,000}\\ \mathrm{Operating}\mathrm{}\mathrm{Profit}\mathrm{}\mathrm{Ratio}=\frac{\mathrm{Operating}\mathrm{}\mathrm{Profit}}{\mathrm{Revenue}\mathrm{}\mathrm{from}\mathrm{}\mathrm{Operations}}\times 100\\ \text{=}\frac{60,000}{4,00,000}\times 100=15\%\end{array}$