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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.

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Solution

## $\mathrm{Net}\mathrm{Sales}=\mathrm{Rs}8,20,000$ $\mathrm{Gross}\mathrm{Profit}=\mathrm{Net}\mathrm{Sales}-\mathrm{Cost}\mathrm{of}\mathrm{Goods}\mathrm{Sold}\phantom{\rule{0ex}{0ex}}=8,20,000-5,20,000\phantom{\rule{0ex}{0ex}}=\mathrm{Rs}3,00,000$ $\mathrm{Net}\mathrm{Profit}=\mathrm{Gross}\mathrm{Profit}-\mathrm{Operating}\mathrm{Expenses}-\mathrm{Interest}\mathrm{on}\mathrm{Debentures}+\mathrm{Profit}\mathrm{on}\mathrm{Sale}\mathrm{of}\mathrm{Fixed}\mathrm{Asset}\phantom{\rule{0ex}{0ex}}=3,00,000-2,09,000-40,500+81,000\phantom{\rule{0ex}{0ex}}=\mathrm{Rs}1,31,500$ $\mathrm{Net}\mathrm{Profit}\mathrm{Ratio}=\frac{\mathrm{Net}\mathrm{Profit}}{\mathrm{Net}\mathrm{Sales}}×100\phantom{\rule{0ex}{0ex}}=\frac{1,31,500}{8,20,000}×100=16.04%$

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