7. During the year 2017, S Ltd. made sales of * 8,00,000. Its gross profit ratio is 25% and net profit ratio is 10%. The stock turnover ratio was 10 times. Calculate : (i) Gross Profit, (ii) Net Profit, (iii) Cost of goods sold, (iv) Operating Expenses.
Answers
Answer:
Gross profit Ratio = gross profit /Net sales *100
So gross profit is = 800000*25%= 200000
Net profit Ratio = net profit / net sales *100
so net profit is 800000*10%=80000
cost of goods sold = sales- gross profit
800000-200000=600000
operating expenses = net profit - gross profit
= 200000-80000
= 120000
GROSS PROFIT = 200,000
NET PROFIT = 80,000
COST OF GOODS SOLD = 600,000
OPERATING PROFIT = 120,000
GIVEN: S Ltd. made sales of * 8,00,000. Its gross profit ratio is 25% and its net profit ratio is 10%. The stock turnover ratio was 10 times.
TO FIND (i) Gross Profit, (ii) Net Profit, (iii) Cost of goods sold, (iv) Operating Expenses.
SOLUTION:
As we are given in the question,
Sales of the year are 8,00,000 Rs.
Gross Profit is 25%.
The net Profit Ratio is 10%
The stock turnover Ratio of the firm was 10 times.
As we know,
Gross profit Ratio = gross profit /Net sales *100
Gross profit = 800000*2
Gross profit = 200000
Also, Net profit Ratio = net profit / net sales *100
Net Profit = 800000*10%
Net Profit = 80000
And, Cost of goods sold = sales- gross profit
Cost of goods sold = 800000-200000
Cost of goods sold =600000
Similarly, Operating Expenses = net profit - gross profit
Operating Profit = 200000-80000
Operating Profit = 120000.
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