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Concept: Profltabtltty Ratios - Gross Profit Ratio

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Gross Profit Ratio: `"Gross Profit"/"Revenue from Operations"xx100`

Gross Profit = Revenue from Operations – Cost of Revenue from Operations/ Cost of Goods Sold
Cost of Revenue from Operations = Cost of Material Consumed (including direct expenses) + Change in inventories of WIP and Finished Goods.

Or

Opening Inventory + Net Purchases + Direct Expenses – Closing inventory

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