Profitability Ratios - Net Profit Ratio

\[\text{Net Profit Ratio}=\frac{\text{Net Profit after Tax}}{\text{Revenue from Operations}}\times100\]

Net Profit:

Net Profit = Gross Profit + Other Income - Indirect Expenses - Tax

                                                   Or

Net Profit = Revenue from Operations - Cost of Revenue from Operations - Operating Expenses - Non-operating Expenses + Non-operating Income - Tax

Indirect Expenses & Losses = Office Expenses + Selling Expenses + Interest on Long Term Borrowings + Accidental Losses