Question 70 Chapter 4 of +2-B
Table of Contents
IV. Profitability Ratios
70. (GP Ratio/NP Ratio/Operating Ratio) Following is the income statement of Strong for the year ending 31st March. 2018. INCOME STATEMENT FOR THE YEAR ENDING 31ST MARCH, 2018
| Particulars | Amount ₹ | |
| Revenue from Operations (Sales) | 3,00,000 | |
| Add Other Income | ||
| Interest | 900 | |
| Dividend | 2,250 | |
| Profit on Sale of Securities | 450 | 3,600 |
| Total Revenue | 3,03,000 | |
| Less : Expenses | ||
| Purchases | 1,89,150 | |
| Change in Inventories | -13,350 | |
| (Opening Inventory- Closing Inventory) (₹ 45,750 – ₹ 59,100) | ||
| Carriage Inward | 1,200 | |
| Wages | 3,000 | |
| Administrative Expenses | 60,600 | |
| Financial Expenses | ||
| -Interest | 720 | |
| -Discount | 1,440 | |
| Bad Debts | 2,040 | |
| Selling and Distribution Expenses | 7,200 | |
| Non-Opening Expenses | 1,200 | 2,53,200 |
| Net Profit | 50,400 |
You are required to calculate (a) Gross profit ratio (b) Net profit ratio (c) Operating ratio
The solution of Question 70 Chapter 4 of +2-B: –
| (1) Gross Profit Ratio | = | ₹ 1,20,000 | X | ₹ 2,00,000 |
| ₹ 3,00,000 | ||||
| = | 40% |
| (2) Net Profit Ratio | = | ₹ 50,400 | X | 8,00,000 |
| ₹ 3,00,000 | ||||
| = | 16.8% |
| (c) Operating Ratio | = | Operating Cost* | X | 100 |
| Net sales | ||||
| = | ₹ 2,50,000 | X | 100 | |
| ₹ 3,00,000 | ||||
| = | 84% |
| Cost of goods sold | = | Opening Inventory – Closing Inventory + Purchase + Carriage Inwards + Wages |
| = | ₹ 45,750 – ₹ 59,100+ ₹ 1,89,150 + ₹ 1,200 + ₹ 3,000 | |
| = | ₹ 1,80,000 | |
| Gross Profit | = | Sales – Cost of goods sold |
| = | ₹ 3,00,000 – ₹ 1,80,000 | |
| = | ₹ 1,20,000 | |
| Operating Cost | = | Cost of goods sold + Operating Expenses |
| = | ₹ 1,80,000 + ₹ 72,000 | |
| = | ₹ 2,52,000 |
Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
