Question

From the following, calculate Gross Profit Ratio:
Gross Profit:₹50,000; Revenue from Operations ₹5,00,000; Sales Return: ₹50,000.

Answer 1

Net Sales = Rs 5,00,000

Gross Profit = Rs 50,000 

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

`= 50000/500000 xx 100 = 10%`

Note: Here we will not deduct the amount of sales return because the amount of net sales has already been provided in the question.