Question

Calculate gross profit ratio. Sales = ₹ 5,00,000, Sales return = ₹ 50,000 and Cost of goods sold = ₹ 2,75,000.

Answer 1

Net sales = Sales – Sales return = 5,00,000 – 50,000 = ₹ 4,50,000

Gross profit = Net sales – Cost of goods sold = 4,50,000 – 2,75,000 = ₹ 1,75,000

Gross profit ratio = `("Gross profit")/("Net Sales") xx 100`

`= (1,75,000)/(4,50,000) xx 100`

`= 38.89 %`