Question

15. From the following particulars calculate a) Gross profit ratio b) Net profit ratio
and c) Operating profit ratio.
Sales Rs. 5,00,000; Cost of goods sold Rs. 3.00.000; Operating expenses Rs.
1,00,000; Non-operating expenses Rs. 20.000.
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Answer 1

Explanation:

a) Gross profit ratio

= Gross profit/net sales *100

Gross profit = sales - cost of goods sold

= 5,00,000 - 3,00,000

GP = 2,00,000

GP RATIO = GP/SALES *100

= 2,00,000/5,00,000*100

=2/5*100

=2*20=40%

so grossprofit ratio is = 40%

B)net profit ratio

net profit = (sales-Cogs-operating expenses-non operating expenses)

=5,00,000 - 3,00,000 - 1,00,000 - 20,000

netprofit =80,000

net profit ratio = net profit/net sales*100

= 80,000/5,00,000*100

=8/50*100

=16%

C)operating profit ratio

=operating profit/net sales*100.

operating profit

= grossprofit - operating expenses

= 2,00,000 - 1,00,000

since Grossprofit calculated in (a) option

OP =1,00,000

Operating profit ratio

= 1,00,000/5,00,000*100

=1/5*10

OPR = 20%

a)Gross profit ratio = 40%

b) net profit ratio. = 16%

c) operating profitratio= 20%