Question

Revenue from Operations ₹ 7,20,000, Gross Profit 20% on Revenue from Operations, Operating Expenses ₹ 36,000. Calculate Operating Profit Ratio.

Answer 1

\[\text{Gross Profit} = ₹7,20,000 \times 20\% = {₹1,44,000}\]

$$\text{Operating Profit} = \text{Gross Profit} - \text{Operating Expenses}$$

$$\text{Operating Profit} = ₹1,44,000 - ₹36,000 = {₹1,08,000}$$

$$\text{Operating Profit Ratio} = \frac{\text{Operating Profit}}{\text{Revenue from Operations}} \times 100$$

$$\text{Operating Profit Ratio} = \frac{₹1,08,000}{₹7,20,000} \times 100 = {15\%}$$