The shopkeeper purchased a pen for 50 and sold it for 8,470, resulting in a profit of 8,420. The profit percentage is calculated as (Profit / Cost Price) × 100, which equates to (8,420 / 50) × 100 = 16,840%. This indicates an exceptionally high profit margin, suggesting a significant markup from the original purchase price.
Question : _____________ratio establishes a relationship between gross profit and Revenue from Operations, i.e. Net Sales.
Option 1: Net profit ratio
Option 2: Operating profit ratio
Option 3: Gross profit ratio
Option 4: None of the above
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