Question 70 Chapter 4 of +2-B

Question 70 Chapter 4 of +2-B

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   
Interest900 
 Dividend 2,250 
Profit on Sale of Securities 4503,600
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 Inward1,200 
 Wages 3,000 
Administrative Expenses60,600 
 Financial Expenses  
 -Interest720 
-Discount1,440 
Bad Debts2,040 
 Selling and Distribution Expenses 7,200 
Non-Opening Expenses 1,2002,53,200
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=₹ 1,20,000X₹ 2,00,000
₹ 3,00,000
 =40%  
(2) Net Profit Ratio=₹ 50,400X8,00,000
₹ 3,00,000
 =16.8%  
(c) Operating Ratio=Operating Cost*X100
Net sales
     
 =₹ 2,50,000X100
 ₹ 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

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 3 min 225x300 - Question 70 Chapter 4 of +2-B  - USHA Publication  12 Class
T.S. Grewal’s Analysis of Financial Statements

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