Question

Cash Sales ₹ 2,20,000; Credit Sales ₹ 3,00,000; Sales Return ₹ 20,000; Gross Profit ₹ 1,00,000; Operating Expenses ₹ 25,000; Non-operating incomes ₹ 30,000; Non-operating Expenses ₹ 5,000. Calculate Net Profit Ratio.

Answer 1

Net Sales = Cash Sales + Credit Sales - Sales Return

= 220000 + 300000 - 20000

= 500000

Net Profit = Gross Profit - Operating Expenses - Non Operating Expenses + Non-operating Incomes

= 100000 - 25000 - 5000 + 30000

= 100000

Net profit Ratio = `"Net Profit"/"Net Sales" xx 100`

`= 100000/500000 xx 100 = 20%`