A company has Revenue from Operations of ₹1,00,000 and Indirect Expenses of ₹25,000. Rate of Gross Profit is 50%. Net Profit ratio will be.......
Answer & explanation
Correct answer: option 1
The correct answer is option 1- 25%.
Gross profit Ratio = Gross profit/Revenue from operations x 100
50 = Gross profit/1,00,000 x 100
Gross profit = 50 x 1,00,000/100
= 50,000
Net profit = Gross Profit - indirect Exp
= 50,000-25,000
= 25,000
Net profit Ratio = Net Profit/Revenue from operations x 100
= 25,000/1,00,000 x 100
= 25%