Question

Operating Cost ₹ 3,40,000; Gross Profit Ratio 20%; Operating Expenses ₹ 20,000. Calculate Operating Profit Ratio.

Answer 1

Cost of Revenue from Operations

=Operating Cost−Operating Expenses 

=3,40,000 - 20,000 = Rs 3,20,000 

Gross Profit =${\displaystyle \frac{320000\times 20}{80}}$= Rs 80000

Revenue from Operations=Cost of Revenue from Operations + Gross Profit                                        

=3,20,000 + 80,000 =Rs 4,00,000 

Operating Profit=Revenue from Operations - Operating Cost 

=4,00,000 − 3,40,000 =Rs 60,000 

Operating Profit Ratio = ${\displaystyle \frac{\text{Operating Profit}}{\text{Revenue from Operations}}\times 100}$

${\displaystyle =\frac{60000}{400000}\times 100=15\%}$