Question

Revenue from Operations, i.e., Net Sales ₹ 8,20,000; Return ₹ 10,000; Cost of Revenue from Operations (Cost of Goods Sold) ₹ 5,20,000; Operating Expenses ₹ 2,09,000; Interest on Debentures ₹ 40,500; Gain (Profit) on Sale of a Fixed Asset ₹ 81,000. Calculate Net Profit Ratio.

Answer 1

$\mathrm{Net}\mathrm{Sales}=\mathrm{Rs}8,20,000$

$$\begin{gathered} \mathrm{Gross}\mathrm{Profit}=\mathrm{Net}\mathrm{Sales}-\mathrm{Cost}\mathrm{of}\mathrm{Goods}\mathrm{Sold} \\ =8,20,000-5,20,000 \\ =\mathrm{Rs}3,00,000 \end{gathered}$$

$$\begin{gathered} \mathrm{Net}\mathrm{Profit}=\mathrm{Gross}\mathrm{Profit}-\mathrm{Operating}\mathrm{Expenses}-\mathrm{Interest}\mathrm{on}\mathrm{Debentures}+\mathrm{Profit}\mathrm{on}\mathrm{Sale}\mathrm{of}\mathrm{Fixed}\mathrm{Asset} \\ =3,00,000-2,09,000-40,500+81,000 \\ =\mathrm{Rs}1,31,500 \end{gathered}$$

$$\begin{gathered} \mathrm{Net}\mathrm{Profit}\mathrm{Ratio}=\frac{\mathrm{Net}\mathrm{Profit}}{\mathrm{Net}\mathrm{Sales}}\times 100 \\ =\frac{1,31,500}{8,20,000}\times 100=16.04\% \end{gathered}$$