Opening Inventory Rs1,00,000; Closing Inventory Rs1,20,000; Purchases Rs20,00,000; Wages Rs2,40,000; Carriage Inwards Rs1,50,000; Selling Exp. Rs60,000; Revenue from Operations Rs30,00,000. Gross Profit ratio will be :

21%

Cost of Revenue from Operation = Purchases + (Opening Inventory – Closing Inventory) + Direct Expenses
                                                 = 20,00,000+1,00,000-1,20,000+2,40,000+1,50,000
                                                 = 23,70,000 
(Direct costs are expenses that directly go into producing goods or providing services, while indirect costs are general business expenses that keep you operating. Selling expenses are indirect expenses and hence are not taken into account for calculating GP)

GP= Revenue from Operations-Cost of Revenue from Operation
    =30,00,000-23,70,000
    = 6,30,000
GP ratio = Gross Profit/Net Revenue of Operations × 100.
             = 6,30,000/30,00,000*100
             = 21%