Calculate Net Profit Ratio:Sales = ₹ 10,00,000, Cost of goods sold =

1.	Calculate Net Profit Ratio:Sales = ₹ 10,00,000, Cost of goods sold = ₹ 4,20,000, Indirect expenses = ₹ 30,000,Administrative expenses = ₹ 1,00,000, Selling and Distribution expenses = ₹ 80,000, Interest on debentures shares = ₹ 40,000.
Answer» Gross profit = Sales – Cost of goods sold = 10,00,000 – 4,20,000 = ₹ 5,80,000 Net profit = Gross profit – Administrative expenses – Selling and Distribution expenses – Indirect expenses – Interest on debentures = 5,80,000 – 1,00,000 – 80,000 – 30,000 – 40,000 = ₹ 3,30,000 Net profit ratio = \(\frac{Net\,profit}{Sales}\times100\) = \(\frac{3,30,000}{10,00,000}\times100\) = 33%

Calculate Net Profit Ratio:Sales = ₹ 10,00,000, Cost of goods sold = ₹ 4,20,000, Indirect expenses = ₹ 30,000,Administrative expenses = ₹ 1,00,000, Selling and Distribution expenses = ₹ 80,000, Interest on debentures shares = ₹ 40,000.

Answer»

Gross profit = Sales – Cost of goods sold

= 10,00,000 – 4,20,000

= ₹ 5,80,000

Net profit = Gross profit – Administrative expenses – Selling and Distribution expenses – Indirect expenses – Interest on debentures

= 5,80,000 – 1,00,000 – 80,000 – 30,000 – 40,000

= ₹ 3,30,000

Net profit ratio = \(\frac{Net\,profit}{Sales}\times100\)

= \(\frac{3,30,000}{10,00,000}\times100\)

= 33%