Question

0.90. (A). Calculate Gross Profit Ratio from the following figures :-
Opening Inventory 40,000 closing inventory 60000 purchases ​

Answer 1

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Explanation:

Inventory ratio = Cost of goods sold / Average inventory

cost of goods sold = Net sales - Gross profit

= 400000 - 100000 = 300000

Average inventory = op. inventory + cl. inventory / 2

= 60000 + 90000 = 15000

so, Inventory ratio = 300000/ 15000 = 20 %

B) Gross profit ratio = Gross profit / Net sales x 100

= 100000/400000 x 100 =25%