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Compute Gross Profit Ratio from the following information: Cost of Revenue from Operations (Cost of Goods Sold) Rs. 5,40,000; Revenue from Operations (Net Sales) Rs. 6,00,000.

SOLUTION

Gross Profit = Revenue from Operations – Cost of Revenue from Operations
= 6,00,000 – 5,40,000
= Rs. 60,000

Gross Profit Ratio = Gross Profit / Revenue from Operations × 100 
= 60,000 / 6,00,000 × 100
 = 10%

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