Calculate operating profit ratio under the following cases :
case 1 : revenue from operations ₹ 8,00,000 , operating profit ₹ 2 ,00,000
case 2 : revenue from operations ₹ 20,00,00 , operating cost ₹ 14,00,000
case 3 : revenue from operations ₹ 10,00,000 gross profit 25% on revenue from operations , operating expenses ₹ 1,00,000
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Answers
Case 1:
- RFO [Revenue from Operations] = Rs 8,00,000
- Operating profit = Rs 2,00,000
Operating profit ratio = (Operating profit ÷ RFO) × 100
Operating profit ratio = (Rs 2,00,000 ÷ Rs 8,00,000) × 100
Operating profit ratio = 25%
Therefore, the operating profit ratio is 25%.
Case 2:
- RFO = Rs 20,00,000
- Operating cost = Rs 14,00,000
Operating profit = Revenue from Operations - Operating cost
Operating profit = Rs 20,00,000 - Rs 14,00,000
Operating profit = Rs 6,00,000
Operating profit ratio = (Operating profit ÷ RFO) × 100
Operating profit ratio = (Rs 6,00,000 ÷ Rs 20,00,000) × 100
Operating profit ratio = 30%
Therefore, the operating profit ratio is 30%.
Case 3:
- RFO = Rs 10,00,000
- Gross profit = 25% of RFO
- Operating expenses = Rs 1,00,000
Gross profit = 25/100 × Rs 10,00,000
Gross profit = Rs 2,50,000
Operating profit = Gross profit - Operating expenses
Operating profit = Rs 2,50,000 - Rs 1,00,000
Operating profit = Rs 1,50,000
Operating profit ratio = (Operating profit ÷ RFO) × 100
Operating profit ratio = (Rs 1,50,000 ÷ Rs 10,00,000) × 100
Operating profit ratio = 15%
Therefore, the operating profit ratio is 15%.
Answer:
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