Study the information given below carefully and answer the following question.

Radhika an alumni of IIM Bangalore initiated her startup Radhika Ltd. in 2020. The profits of Radhika Ltd in the year 2021-2022 after all appropriations was ₹31,25,000. This profit was arrived after taking into consideration the following items:-

Additional Information:

Operating profit before working capital changes will be……………………

₹39,67,500

The correct answer is option 3- ₹39,67,500.

Net profit before tax  and Extraordinary items = Net profit after all appropriations + Transfer to general Reserve + Provision for taxation
                                 = 31,25,000 + 4,37,500 + 8,75,000
                                 = 44,37,500

Add : Deductions already made in Statement of Profit and Loss on account of Non-cash items such as Depreciation, Goodwill to be Written-off- 7,80,000
Less: Additions (incomes) made in Statement of Profit and Loss on Account of Non-operating items such as Dividend received, Profit on sale of Fixed Assets- 12,50,000

Operating profit before working capital changes = (44,37,500 + 7,80,000 - 12,50,000)
                                                                                 = 39,67,500