Question : Revenue from Operations Rs. 8,00,000; Gross Profit Ratio 25%; Operating Ratio 90%; Nonoperating Expenses Rs. 4,000; Non-operating Income T44,000. Net Profit Ratio will be
Option 1: 25%
Option 2: 20%
Option 3: 15%
Option 4: 5%
Correct Answer: 15%
Solution :
Answer =
15%
Net profit ratio=$\frac{Net profit \times 100}{\text {Net sales}}$= $\frac{1,20,000×100}{8,00,000}$=15%.
Gross profit ratio=$\frac{G \cdot P \times 100}{\text {Net sates }}$
⇒G.P=G.P ratio × net sales= 8,00,000×25%=2,00,000.
Operating profit ratio=$\frac{\text{Cost of goods sold+operating expenses} \times 100}{\text {Net sales }}$
⇒COGS= S.P-G.P= 8,00,000- 2,00,000= 6,00,000.
90%=$\frac{6,00,000+op. exp}{\text {8,00,000}}$
Operating expenses= 7,20,000-6,00,000= 1,20,000
Net profit= G.P. - operating expenses - Non-operating expenses + Incomes
⇒ 2,00,000 - 1,20,000 - 4,000 + 44,000 = 2,44,000 - 1,24,000 = 1,20,000.
Hence, the correct option is 3.
