Question

If Net Sales are Rs. 5,00,000 Cost of
Goods Sold are Rs. 2,20,000 and
Gross Profit is Rs. 2,80,000 what is
the Gross Profit ratio?​

Answer 1

Explanation:

Gven :

Net Sales = Rs. 5,00,000

Cost of Goods Sold = Rs. 2,20,000

Gross Profit = Rs. 2,80,000

To find :

The Gross Profit ratio

Solution :

Net Sales = Rs. 5,00,000

Gross Profit = Net Sales - Cost of Goods Sold

⇒ 2,80,000 = 5,00,000 - 2,20,000

$Gross \: Profit \: ratio = \frac{Gross \: Profit}{Net \: Sales}$

$Gross \: Profit \: ratio = \frac{2,80,000}{5,00,000}$

⇒ 0.56

The Gross Profit ratio = 0.56

★ Gross profit ratio is written in percentage form also known as Gross profit margin or Gross profit percentage :

$Gross \: Profit \: ratio = \frac{Gross \: profit}{Net \: Sales} \times 100$

$Gross \: profit \: ratio = \frac{2,80,000}{5,00,000} \times 100$

⇒ 0.56 × 100

⇒ 56%

Answer 2

$\sf{\bold{\green{\underline{\underline{Given :}}}}}$

Net sales = 5,00,000

Cost of Goods Sold = 2,20,000

Gross profit = 2,80,000

$\sf{\bold{\blue{\underline{\underline{To \: Find :}}}}}$

● Gross profit ratio

$\huge{\underline{\underline{\pink{\tt{Solution :}}}}}$

$\underline{\boxed{\sf{\pink{Gross \: profit = Net sales - Goods \:sold }}}}$

Net sales = 500,000

Gross profit = 500,000 - 2,80,000

Gross profit = 220,000

Therefore,

$\longmapsto{\tt{ Gross \: profit\: ratio ={\frac{ Gross \: profit}{Net sales}}}}$

$\longmapsto{\tt{ Gross \: profit\: ratio ={\frac{ 2,80,000}{5,00,000}}}}$

${\tt{\red{Gross\: profit \: ratio \: is \: 0.56}}}$

❥Gross profit is written in the form of percentage.

$\longmapsto{\tt{ Gross \: profit\: ratio ={\frac{ Gross \: profit}{Net sales}}}} × 100$

$\longmapsto{\tt{ Gross \: profit\: ratio ={\frac{2,80,000}{5,00,000}}}} × 100$

$\longmapsto{\tt{0.56×100}}$

$\longmapsto{\tt{56}}$