Question

Revenue from Operations ₹4,00,000; Gross Profit Ratio 25%; Operating Ratio 90%. Non-operating Expenses ₹2,000; Non-operating Income ₹22,000. Calculate Net Profit Ratio.

Answer 1

$\begin{array}{l}\text{Net Profit}=\text{Operating Profit + Non Operating Incomes}-\text{Non Operating Expenses}\\ =40\text{,000+22,000- 2,000}=\text{Rs 60,000}\\ \text{Operating Profit Ratio}=100-\text{Operating Ratio =100-90 =10\%}\\ \text{Operating Profit}=4,00,000\times 10\%=\text{Rs 40,000}\\ \mathrm{Net}\mathrm{}\mathrm{Profit}\mathrm{}\mathrm{Ratio}=\frac{\mathrm{Net}\mathrm{}\mathrm{Profit}}{\mathrm{Revenue}\mathrm{}\mathrm{from}\mathrm{}\mathrm{operations}}\times 100\\ \text{=}\frac{60,000}{4,00,000}\times 100=15\%\\ \end{array}$