Question 136 Chapter 4 of +2-B
Table of Contents
Miscellaneous
136. Calculate Operating Profit Ratio from the following information:
Calculate Inventory Turnover Ratio; Gross Profit Ratio; and Opening Ratio.
| Rs. | Rs. | ||
| Revenue From Operations, i.e., Net Sales | 1,50,000 | Opening Inventory | 29,000 |
| Gross Profit | 30,000 | Closing Inventory | 31,000 |
| Cost of Revenue From Operations (Cost of Goods Sold) | 1,20,000 | Debtors | 16,000 |
From the above information, calculate following ratios:
(i) Gross Profit Ratio,
(ii) Inventory Turnover Ratio, and
(iii) Trade Receivables Turnover Ratio.
The solution of Question 136 Chapter 4 of +2-B: –
I
| Sales | = | Rs. 1,50,000 |
| Gross Profit | = | Rs. 30,000 |
| Gross Profit Ratio | = | Gross Profit | X | 100 |
| Net Sales |
| Gross Profit Ratio | = | Rs 30,000 | X | 100 |
| Rs 1,50,000 | ||||
| = | 20% |
II
| Average Inventory | = | Opening Inventory + Closing Inventory |
| 2 |
| = | Rs. 29,000 +Rs 31,000 | |
| 2 | ||
| = | Rs. 30,000 |
| Average Inventory Turnover Ratio | = | Cost of Goods Sold |
| Average Inventory |
| = | Rs. 1,20,000 | |
| Rs. 30,000 | ||
| = | 4 Times |
III
| Trade Receivable Turnover Ratio | = | Net Credit Sales |
| Average Trade Receivable |
| Trade Receivable Turnover Ratio | = | Rs 1,50,000 |
| Rs 16,000 | ||
| = | 9.4 Times |
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Also, Check out the solved question of previous Chapters: –
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
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