What will be the gross profit ratio of the company if total sales are ₹4,20,000, sales returns are ₹20,000, and the cost of goods sold ₹3,20,000?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- 20%.
Net revenue from operations = Revenue from operations - sales return
= 4,20,000 - 20,000
= ₹4,00,000
Gross profit = Net revenue from operations - Cost of revenue from operations
= 4,00,000-3,20,000
= ₹80,000
Gross Profit Ratio = Gross Profit/Net Revenue of Operations × 100
= ( 80,000/4,00,000) x 100
= 20%