# Question 71 Chapter 4 of +2-B – USHA Publication 12 Class Q-71- CH-4 Book 2 - Usha Pub. +2 Book 2020 - Solution

Question 71 Chapter 4 of +2-B

IV. Profitability Ratios

71. (GP Ratio & Operating Ratio) Opening Inventory ₹ 80,000 ; Purchases ₹ 4,30,900 ; Direct expenses ₹ 4,000 ; Closing Inventory ₹ 1,60,000 ; Administrative expenses ₹ 21,100 ; Selling and distribution expenses ₹ 40,000 ; Sales (Revenue from Operation) ₹ 10,00,000 Calculate.
(a) Gross profit ratio
(b) Operating ratio

## The solution of Question 71 Chapter 4 of +2-B: –

 (1) Gross Profit Ratio = ₹ 6,45,100 X ₹ 2,00,000 ₹ 10,00,000 = 64.51%
 (2) Net Profit Ratio = ₹ 4,16,000 X 8,00,000 ₹ 10,00,000 = 41.6%
 Gross Profit = Net Sales + Closing stock – (opening stock + net purchases + Direct Expenses) = ₹ (10,00,000 + 1,60,000) – ( 80,000 + 4,30,900 + 4,000) = ₹ 6,45,100 Cost of goods sold = Sales – Gross Profit = ₹ 10,00,000 – ₹ 6,45,100 = ₹ 3,54,900 Operating Cost = Cost of goods sold + Operating Expenses = ₹ 3,54,900 + ₹ 61,100 = ₹ 4,16,000

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