Operating Cost Rs. 3,40,000; Gross Profit Ratio 20%; Operating Expenses Rs. 20,000. Calculate Operating Profit Ratio.

SOLUTION

Cost of Revenue from Operations = Operating Cost-Operating Expenses
= 3,40,000 – 20,000
= Rs 3,20,000

Gross Profit = 3,20,000 × 2080
= Rs 80,000

Revenue from Operations = Cost of Revenue from Operations + Gross Profit
= 3,20,000 + 80,000
= Rs 4,00,000

Operating Profit = Revenue from Operations – Operating Cost
= 4,00,000 − 3,40,000
= Rs 60,000

Operating Profit Ratio = Operating Profit / Revenue from Operations × 100
= 60,000 / 4,00,000 × 100
= 15%                      

Leave a Reply