Question

Calculate gross profit ratio form the following: Revenue from operations ₹ 2,50,000, Cost of revenue from operation ₹ 2,10,000 and Purchases ₹ 1,80,000.

Answer 1

Gross profit ratio = `"Gross profit"/"Revenue from operations" xx 100`

Gross profit = Revenue from operations - Cost of revenue from operations

= 2,50,000 - 2,10,000

= Rs. 40,000

Gross profit ratio = `40000/250000 xx 100` = 16%