The motto of 'Pharma Ltd', a company engaged in the manufacturing of low-cost generic medicines, is 'Healthy India'. Its management and employees are hardworking, honest and motivated. The net profit of the company doubled during the year ended 31-3-2014. Encouraged by its performance, the company decided to pay the bonus to all employees at double the rate than last year. Following is the Comparative Statement of Profit and Loss of the company for the years ended 31-3-2013 and 31-3-2014.
| Pharma Ltd Comparative Statement of Profit and Loss |
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| Particulars | Note No. |
2012-13 Rs |
2013-14 Rs |
Absolute Rs |
% Change |
|
Revenue from operations Less Employee benefit expenses Profit before tax Tax Rate 25% Profit after tax |
20,00,000 12,00,000 8,00,000 2,00,000 6,00,000 |
30,00,000 14,00,000 16,00,000 4,00,000 12,00,000 |
10,00,000 2,00,000 8,00,000 2,00,000 6,00,000 |
50 16-87 100 100 100 |
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1) Calculate Net Profit Ratio for the years ending 31st March, 2013 and 2014
2) Identify any two values which ‘Pharma Ltd’ is trying to propagate
Solution
For 2013
Net Profit Ratio = `"Net Profit after Tax"/"Revenue from Operations" xx 100
= `600000/2000000 xx 100`
= 30%
For 2014
Net Profit Ratio = `"Net Profit after Tax"/"Revenue from Operations" xx 100`
`= 1200000/3000000 xx 100`
= 40%
The following are the values that are propagated by pharma Ltd.
1) Staff welfare (since it depicts concerns for its staff members)
2) Boosting the morale of employees
