# Question 114 Chapter 4 of +2-B – USHA Publication 12 Class Question 114 Chapter 4 of +2-B

Miscellaneous (Analytical Questions)

114. (GP Ratio/Inventory T/O Ratio/Trade Receivable T/O Ratio/Net Profit Ratio) The following information is given about a company :

 ₹ Sales (Revenue from Operation) 4,00,000 Gross profit 10,000 Cost of goods sold (i.e. Cost of Revenue from Operations) Opening Inventory Closing Inventory 20,000 Trade Receivable 1,00,000 Net profit 3,000 Net fixed assets 60,000

From the above information, calculate the following ratios : (i) Gross profit ratio. (ii) Inventory turnover ratio.(iii) Trade Receivable turnover ratio. (iv) Net profit ratio.

The solution of Question 114 Chapter 4 of +2-B: –

 (i) Inventory Turnover Ratio = Cost of goods sold Average Inventory = ₹ 1,20,000 ₹ 30,000 = 4 times
 (ii) Gross Profit Ratio = Gross Profit X 100 Net Sales = ₹ 30,000 X 100 ₹ 1,50,000 = 20%
 (iii) Trade Receivables Turnover Ratio = Net Sales Average Trade Receivable = ₹ 1,50,000 ₹ 16,000 = 9.375 times

 (iv) Net Profit Ratio = Net Profit X 100 Net Sales = ₹ 14,000 X 100 ₹ 1,50,000 = 9.33%

Working Notes :-

 Average Inventory = Opening Inventory + Closing Inventory 2 = ₹ 29,000 + ₹ 31,000 2 = ₹ 30,000

Also, Check out the solved question of previous Chapters: –