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Question 76 Chapter 4 of +2-B
IV. Profitability Ratios
76. (GP Ratio/NP Ratio/ Operating Ratio) The following is the profit and loss account of Wye Limited for the year ended on 31st March, 2018
| Particulars | Amount ₹ | |
| Revenue from Operations (Sales) | 5,00,000 | |
| Add Other Income | ||
| Dividend Received | 5,000 | |
| Total Revenue | 5,05,000 | |
| Less : Expenses | ||
| Purchases | 3,00,000 | |
| Change in Inventories | -20,000 | |
| (Opening Inventory- Closing Inventory) | ||
| (₹ 70,000 - ₹ 90,000) | ||
| Carriage Inward | 6,000 | |
| Wages | 14,000 | |
| Administrative Expenses | 1,02,000 | |
| Selling & Distribution System | 20,000 | |
| Interest | 3,000 | 4,25,000 |
| Net Profit | 80,000 |
You are required to calculate : (a) Gross profit ratio (b) Net profit ratio (c) Operating ratio.
| (a) Operating Profit Ratio | = | ₹ 2,00,000 | X | 100 |
| ₹ 5,00,000 | ||||
| = | 40% | |||
| (b) Net Profit Ratio | = | ₹ 80,000 | X | 100 |
| ₹ 5,00,000 | ||||
| = | 16% | |||
| (c) Operating Ratio | = | ₹ 4,22,000 | X | 100 |
| ₹ 5,00,000 | ||||
| = | 84.4% |
| Cost of goods sold | = | Opening Stock + Purchases + Factory Expenses – Closing Stock |
| = | ₹ 70,000 + ₹ 3,00,000 + ₹ 6,000 + ₹ 14,000 - ₹ 90,000 | |
| = | ₹ 3,00,000 | |
| Operating cost | = | Cost of goods sold + Administrative Expenses + Selling and Distribution expenses |
| = | ₹ 3,00,000 - ₹ 1,02,000 + ₹ 20,000 | |
| = | ₹ 4,22,000 | |
| Gross Profit | = | Sales - Cost of goods sold |
| = | ₹ 5,00,000 - ₹ 3,00,000 | |
| = | ₹ 2,00,000 |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "Question 76 Chapter 4 of +2-B - USHA Publication 12 Class", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to USHA Publication Part 2 volume I.
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