Revenue from Operations Rs. 4,00,000; Gross Profit Ratio 25%; Operating Ratio 90%. Non-operating Expenses Rs. 2,000; Non-operating Income Rs. 22,000. Calculate Net Profit Ratio.

SOLUTION

Net Profit = Operating Profit + Non-Operating Incomes – Non Operating Expenses
= 40,000 + 22,000 – 2,000
= Rs. 60,000

Operating Profit Ratio = 100 − Operating Ratio
=100 – 90
=10%

Operating Profit = 4,00,000 × 10%
= Rs. 40,000

Net Profit Ratio = Net Profit / Revenue from operations × 100
= 60,000 / 4,00,000 × 100
= 15%