Practical Problem 14
Calculate the Gross Profit Ratio
Sales | ₹ 2,70,000 |
Net purchases | ₹ 1,50,000 |
Sales Ratio | ₹ 20,000 |
Closing Stock | ₹ 25,000 |
Operating Stock | ₹ 45,000 |
SOLUTION:
Net sales = Sales – Sales return
= 2,70,000 – 20,000
= ₹ 2,50,000
Cost of goods sold = Opening stock + Net purchase – Closing stock
= 45,000 + 1,50,000 – 25,000
= ₹ 1,70,000
Gross profit = Net sales – Cost of goods sold
= 2,50,000 – 1,70,000
= ₹ 80,000
Gross Profit ratio = (Gross Profit)/(Net Sales) × 100
∴ Gross Profit Ratio =80,000/2,50,000 x 100
∴ Gross Profit Ratio = 32%