Gross Profit Ratio of a company was 25%. If credit revenue from operation was ₹20,00,000 and cash revenue from operation is 20% of total revenue. If indirect expense of the company was ₹50,000. Calculate Net Profit Ratio?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 23%
Cash revenue is 20% of total revenue, so credit revenue is 80% of it.
Total revenue from operations = ₹20,00,000 ÷ 80% = ₹25,00,000
Gross profit = 25% of ₹25,00,000 = ₹6,25,000
Net profit = ₹6,25,000 − ₹50,000 = ₹5,75,000
Net Profit Ratio = ₹5,75,000 ÷ ₹25,00,000 × 100 = 23%
NCERT (2026-27 edition):
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