| Opening Inventory | 1,00,000 | Closing Inventory | 1,50,000 |
| Purchases | 10,00,000 | Loss by fire | 20,000 |
| Revenue from Operations, i.e., Net Sales | 14,70,000 | Dividend Received | 30,000 |
| Administrative and Selling Expenses | 1,70,000 |
SOLUTION
Cost of Goods Sold = Opening Inventory + Purchases – Closing Inventory
= 1,00,000 + 10,00,000 – 1,50,000
= 9,50,000
Operating Expenses = Administrative and Selling Expenses
= 1,70,000
Operating Cost = Cost of Goods Sold + Operating Expenses
= 9,50,000 + 1,70,000
= 11,20,000
Net Sales = 14,70,000
Operating Ratio = Operating Cost / Net Sales × 100
= 11,20,000 / 14,70,000 × 100
= 76.19%
Operating Profit Ratio = 100 – Operating Ratio
= 100 – 76.19
= 23.81%