Question

 If the gross profit ratio for year 2017, 2018 and 2019 is 20%, 25% and 30%respectively, then average gross profit ratio will be____​

Answer 1

Answer

Gross Profit is calculated by the below equation:

Gross Profit = Sales - Cost of goods sold

In the given situation, gross profit is 20% on the cost of goods sold.

Hence, assume cost of goods sold is 100, than the sales will be Rs.100+ Rs.20 i.e. Rs.120

Accordingly

Cost of goods sold will be = Rs.150000 * 100

120

Cost of goods sold = Rs. 125000

Therefore Gross Profit = Cost of Goods sold * 20%

Gross Profit = Rs.125000 * 20%

Gross Profit = Rs.25000

Answer 2

The value of  average gross profit ratio will be 25%.

Step-by-step explanation:

Given:

The  gross profit ratio for year 2017, 2018 and 2019 is 20%, 25% and 30% respectively.

To Find:

The value of average  gross profit ratio.

Formula Used:

The  value of average gross profit ratio =  Total of gross profit ratio of various years/Total of number of years                    ----formula no 01

Solution:

As given- The  gross profit ratio for year 2017, 2018 and 2019 is 20%, 25% and 30% respectively.

Applying the formula no .01.

The value of  average gross profit ratio = (gross profit ratio for year 2017+ gross profit ratio for year 2017+ gross profit ratio for year 2017)/ Total of number of years

                    $=\frac{(20\%+25\%+30\%)}{3}$

                    $=\frac{75\%}{3}$

                    $=25\%$

Thus, The value of  average gross profit ratio will be 25%.