Question

Revenue from Operations ₹ 4,00,000; Gross Profit Ratio 25%; Operating Ratio 90%. Non-operating Expenses ₹ 2,000; Non-operating Income ₹22,000. Calculate Net Profit Ratio.

Answer 1

Net Profit = Operating Profit + Non Operating Incomes − Non Operating Expenses

= 40,000 + 22,000 - 2,000

= Rs 60,000

Operating Profit Ratio = 100 − Operating Ratio

= 100 - 90 = 10% 

Operating Profit = Sales × 10 % 

= 4,00,000 × 10%

= Rs 40,000 

Net Profit Ratio = `"Net Profit"/"Revenue from operations" xx 100`

`= 60000/400000 xx 100 = 15 %`