Cash Sales Rs. 2,20,000; Credit Sales Rs. 3,00,000; Sales Return Rs. 20,000; Gross Profit Rs. 1,00,000; Operating Expenses Rs. 25,000; Non-operating incomes Rs. 30,000; Non-operating Expenses Rs. 5,000. Calculate Net Profit Ratio.

SOLUTION

Net Sales = Cash Sales + Credit Sales – Sales Return
= 2,20,000 + 3,00,000 – 20,000
= 5,00,000

Net Profit = Gross Profit – Operating Expenses – Non-operating Expenses + Non-operating incomes
= 1,00,000 – 25,000 – 5,000 + 30,000
= 1,00,000

Net Profit Ratio = Net profit ×100 / Net Sales
= 1,00,000 × 100 / 5,00,000
= 20%