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.
Question : Revenue from Operations Rs. 9,00,000, Gross Profit 25% on Cost, Operating Expenses Rs. 90,000. Operating Ratio are
Option 2: 30%
Option 3: 90%
Option 4: None of the above
Question : ___________measures the relationship between Operating Profit and Revenue from Operations, i.e., Net Sales.
Option 1: Operating profit ratio
Option 2: Operating ratio
Option 3: Net profit ratio
Option 4: Gross profit ratio
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