Question

Revenue from Operations ₹ 9,00,000; Gross Profit 25% on Cost; Operating Expenses ₹ 45,000. Calculate Operating Profit Ratio.

Answer 1

$\begin{array}{l}\text{Gross Profit = 9,00,000}\times \frac{25}{125}=\text{\hspace{0.17em}Rs 1,80,000}\\ \text{Operating Profit}=\text{Gross Profit-Operating Expenses}\\ =1,80\text{,000}-\text{45,000}=\text{Rs 1,35,000}\\ \mathrm{Operating}\mathrm{}\mathrm{Profit}\mathrm{}\mathrm{Ratio}=\frac{\mathrm{Operating}\mathrm{}\mathrm{Profit}}{\mathrm{Revenue}\mathrm{}\mathrm{from}\mathrm{}\mathrm{Operations}}\times 100\\ \text{=}\frac{1,35,000}{9,00,000}\times 100=15\%\end{array}$