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Revenue from Operations, i.e., Net Sales Rs. 8,20,000; Return Rs. 10,000; Cost of Revenue from Operations (Cost of Goods Sold) Rs. 5,20,000; Operating Expenses Rs. 2,09,000; Interest on Debentures Rs. 40,500; Gain (Profit) on Sale of a Fixed Asset Rs. 81,000. Calculate Net Profit Ratio.

SOLUTION

Net Sales = Rs. 8,20,000
Gross Profit = Net Sales – Cost of Goods Sold
= 8,20,000 – 5,20,000
= Rs. 3,00,000

Net Profit = Gross Profit – Operating Expenses – Interest on Debentures + Profit on Sale of Fixed Asset
= 3,00,000 – 2,09,000 – 40,500 + 81,000
= Rs. 1,31,500

Net Profit Ratio = Net Profit / Net Sales × 100
= 1,31,500 / 8,20,000 × 100
= 16.04%



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