Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

A company has Revenue from Operations of Rs 1,00,000 and Indirect Expenses of Rs 25,000. Rate of Gross Profit is 50%. Net Profit ratio will be.......

Options:

25%

50%

75%

85%

Correct Answer:

25%

Explanation:

Gross Profit = Sales * GPR
                 = 50% of 1,00,000
                 = 50,000
Net profit = GP - indirect Exp
               = 50,000-25,000
               = 25,000
Net profit Ratio = Net Profit/Sales * 100
                         = 25000*100/ 100,000
                        = 25%