Question

(3) XYZ Ltd. has the target revenue for
FY 2019-20 of Rs. 2500 Crore. However
due to economic recession its revenue
accruals suffered and the operating
profit achieved during FY 2019-20 was
only Rs. 4 Crore. Calculate the amount of
revenue by which XYZ Ltd. fell short of
its target if the company's operating
profit is 0.25% of its revenue.​

Answer 1

Given:

• Target revenue of the company = Rs.$2500Crores$
• There was an economic recession in FY 2019-20 due to which the company's revenue accruals suffered.
• Operation profit achieved during the FY 2019-20 = $4Crores$

To determine:

Amount of revenue shortage of the company from the target revenue .

Step-wise Solution:

As per the given data, the company's operating profit for the FY 2019-20 is $0.25$% of it's revenue actually acquired in that financial year.

⇒ The operating profit of $4 Crores$ is $0.25$% of the actual revenue acquired.

The actual revenue acquired is mathematically calculated as follows:

Let the actual revenue be denoted by "$A$".

⇒$(0.25/100)A=4 Crores$

⇒$A=4*(100/0.25)$

⇒$A=4*400$

⇒$A=1600Crores$

∴ The actually acquired revenue by the company for the FY 2019-20 is $1600Crores$.

Now,

The target amount is available and the actually acquired revenue is available. The amount of revenue that fell short from the target revenue is to be calculated:

Let the amount fell short be denoted by "$S$".

Let the target revenue be denoted by "$T$".

The amount that fell short is given by:

$S=T-A\\S=2500Crores-1600Crores\\S=900Crores$

Final Answer:

The required amount of revenue that fell short from the target revenue of XYZ company is $900Crores$.