Question

The motto of 'Nav Hind Pharma Limited', a company engaged in the manufacturing and distribution of Aurvedic medicines, is 'Healthy India'. Its management and employees are hardworking, honest and motivated. The net profit of the company doubled during the year ended $\mathrm{31.3.2014}$. Encouraged by its performance, the company decided to pay one month's extra salary to all its employees.
Following is the Comparative Statement of Profit and Loss of the company for the years ended $\mathrm{31.3.2013}$ and $\mathrm{31.3.2014}$ :
i) Calculate New Profit Ratio for the years ending $\mathrm{31.3.2013}$ and $\mathrm{31.3.2014}$.
ii) Identify any two value which 'Nav Hind Pharma Limited' is trying to communicate.

Answer 1

Net Profit Ratio = $\frac{NetProfitafterTax}{RevenuefromOperations}\times 100$
= $\frac{8,00,000}{40,00,000}\times 100$
= $20\%$
For 2014
Net profit Ratio = $\frac{NetProfitafterTax}{RevenuefromOperations}\times 100$
= $\frac{16,00,000}{60,00,000}\times 100$
= $26.67\%$
The following are the values that are propagated by Nav Hind Pharma Ltd.
i) Staff Welfare (since it depicts concerns for its staff members)
ii) Boosting the morale of employees.