Calculate the net profit from the following information-
| Sales | ₹2000000 |
| Gross profit ratio | 30% |
| Operating ratio | 80% |
| Non-operating expenses | ₹30000 |
| Non-operating income | ₹50000 |
Answer & explanation
Correct answer: option 4
Net profit = operating profit - non-operating expenses + non-operating income
= 400000 - 30000 + 50000
= ₹420000
* Operating profit= Sales X operating profit ratio
= 2000000 X 20/100
= ₹400000
*Operating Profit Ratio = 100 – Operating Ratio
= 100 - 80
= 20%