Question

net profit ratio shows the relation between net profit and....?​

Answer 1

$\boxed {Answer}$

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$\sf {\underline {\mathtt {\blue {✰What\: is\: Net\: profit\: Ratio? }}}}$

➩ ᴛʜᴇ ɴᴇᴛ ᴘʀᴏғɪᴛ ᴘᴇʀᴄᴇɴᴛᴀɢᴇ ɪs ᴛʜᴇ ʀᴀᴛɪᴏ ᴏғ ᴀғᴛᴇʀ-ᴛᴀx ᴘʀᴏғɪᴛs ᴛᴏ ɴᴇᴛ sᴀʟᴇs. ɪᴛ ʀᴇᴠᴇᴀʟs ᴛʜᴇ ʀᴇᴍᴀɪɴɪɴɢ ᴘʀᴏғɪᴛ ᴀғᴛᴇʀ ᴀʟʟ ᴄᴏsᴛs ᴏғ ᴘʀᴏᴅᴜᴄᴛɪᴏɴ, ᴀᴅᴍɪɴɪsᴛʀᴀᴛɪᴏɴ, ᴀɴᴅ ғɪɴᴀɴᴄɪɴɢ ʜᴀᴠᴇ ʙᴇᴇɴ ᴅᴇᴅᴜᴄᴛᴇᴅ ғʀᴏᴍ sᴀʟᴇs, ᴀɴᴅ ɪɴᴄᴏᴍᴇ ᴛᴀxᴇs ʀᴇᴄᴏɢɴɪᴢᴇᴅ. ... ɪᴛ ɪs ᴀʟsᴏ ᴜsᴇᴅ ᴛᴏ ᴄᴏᴍᴘᴀʀᴇ ᴛʜᴇ ʀᴇsᴜʟᴛs ᴏғ ᴀ ʙᴜsɪɴᴇss ᴡɪᴛʜ ɪᴛs ᴄᴏᴍᴘᴇᴛɪᴛᴏʀs.

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$\sf {\underline {\mathtt {\pink {✰How\: do\: you\: calculate\: net\: profit\: ratio? }}}}$

➩ ᴛʜᴇ ɴᴇᴛ ᴘʀᴏғɪᴛᴀʙɪʟɪᴛʏ ʀᴀᴛɪᴏ ғᴏʀᴍᴜʟᴀ ᴄᴏɴsɪsᴛs ᴏғ ᴅɪᴠɪᴅɪɴɢ ᴛʜᴇ ɴᴇᴛ ᴘʀᴏғɪᴛ ʙʏ ɴᴇᴛ sᴀʟᴇs. ʙᴇғᴏʀᴇ ʏᴏᴜ ᴄᴀɴ ᴀᴘᴘʟʏ ғɪɢᴜʀᴇs ᴛᴏ ᴛʜɪs ғᴏʀᴍᴜʟᴀ, ʏᴏᴜ ɴᴇᴇᴅ ᴛᴏ ᴄᴀʟᴄᴜʟᴀᴛᴇ ᴛʜᴇ ɴᴇᴛ ᴘʀᴏғɪᴛ ᴀɴᴅ ɴᴇᴛ sᴀʟᴇs ᴏғ ʏᴏᴜʀ ᴄᴏᴍᴘᴀɴʏ.

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$\sf {\underline {\mathtt {\purple {✰Relationship\: of\: net\: profit\: ratio:- }}}}$

➩ ɴᴇᴛ ᴘʀᴏғɪᴛ ʀᴀᴛɪᴏ (ɴᴘ ʀᴀᴛɪᴏ) sʜᴏᴡs ʀᴇʟᴀᴛɪᴏɴsʜɪᴘ ʙᴇᴛᴡᴇᴇɴ ɴᴇᴛ ᴘʀᴏғɪᴛ ᴀғᴛᴇʀ ᴛᴀx ᴀɴᴅ ɴᴇᴛ sᴀʟᴇs. ɪᴛ ɪs ᴄᴏᴍᴘᴜᴛᴇᴅ ʙʏ ᴅɪᴠɪᴅɪɴɢ ᴛʜᴇ ɴᴇᴛ ᴘʀᴏғɪᴛ (ᴀғᴛᴇʀ ᴛᴀx) ʙʏ ɴᴇᴛ sᴀʟᴇs.

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Thank you ❣️