Question

net profit ratio - 20 % , Indirect Expenses - 80,000 , Cash Sales - 3,00,000 , Credit Sales 80% of Total Sales .
Find Gross Profit Ratio ​

Answer 1

Answer:

Gross profit ratio = 25% = {Gross profit / Revenue from operation ( Total sales)} x 100

Let total sales be X

Cash sales + Credit sales = Total sales

2,00,000 + 90% (X) = X

2,00,000 = X - 9/10 (X)

2,00,000 = 1/10 (X)

X = 20,00,000

Thus 2,00,000 + 18,00,000 ( 90% of 20,00,000) = 20,00,000 = Total sales.

With the total sales, find the gross profit which we can assume as Y

25 = Y / 20,00,000 x 100

Y = 25 x 20,00,000 / 100 = 5,00,000.

Thus gross profit = 5,00,000

Now we have to find the Net profit in order to calculate the NET PROFIT RATIO = Net profit / Total sales x 100

Net profit = Gross profit - Indirect expenses.

Net profit = 5,00,000 - 20,000 = 4,80,000

Net profit ratio = 4,80,000 / 20,00,000 x 100 = 24 %

THUS NPR = 24%