Calculate Operating Profit from the following information.
Gross Profit Ratio is 65%. Revenue from operations is of ₹10,00,000 and Operating Expenses are of ₹3,00,000.
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹3,50,000.
Gross Profit Ratio = Gross Profit/Net Revenue of Operations × 100
65 = Gross profit/10,00,000 x 100
Gross Profit = 65 x 10,00,000/100
= ₹6,50,000
Operating profit = Gross Profit - Operating Expenses + Operating income
= 6,50,000-3,00,000
= 3,50,000
So, operating profit is ₹3,50,000.
* There is no information regarding operating income so it is considered nil.