Question

2. What is net profit ratio, if net profit
is Rs. 100000 and sales is Rs
.500000*
O 1) 30%
O O
2) 16%
O 3) 20%
O
4)50%​

Answer 1

Given :

Net Profit = 1,00,000

Sales = 5,00,000

To Find :

Net Profit Ratio

${\underline{\sf{ \: Net \: Profit \: Ratio = \cfrac{Net \: Profit}{Sales} \times 100 }}}$

Solution :

$\sf \to \: Net \: Profit \: Ratio = \frac{Net \: Profit}{Sales} \times 100$

$\sf\to \: \frac{100000}{500000} \times 100$

$\sf\to \: 0.2 \times 100$

$\sf\to \: 20$

Therefore,

Net Profit Ratio = 3) 20%

Net Profit Ratio :

It is calculated by relating net profit after tax to revenue from operations. (Or Sales)