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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
A trader carries an average Inventory of ₹1,00,000. His Inventory Turnover Ratio is 8 times; he sells goods at a profit of 25% of cost. Calculate Gross Profit Ratio.
Cost of Revenue from Operations = Average Inventory × Inventory Turnover Ratio = 1,00,000 × 8 = ₹8,00,000
Gross Profit = 25% of 8,00,000 = ₹2,00,000
Revenue from Operations = Cost of Revenue from Operations + Gross Profit = 8,00,000 + 2,00,000 = ₹10,00,000
Gross Profit Ratio = Gross Profit ÷ Revenue from Operations × 100 = 2,00,000 ÷ 10,00,000 × 100 = 20%
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 "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.141 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
You can take our custom-built interactive practice quiz directly on this page to test your understanding of "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.141 - Accounting Ratios" instantly.