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Question
Read the following hypothetical extract of ABC Ltd. and answer the question that follows:
The following information is given:
| Trade Receivables Turnover Ratio | 4 times |
| Current Liabilities | ₹ 5,000 |
| Average Debtors | ₹ 1,80,000 |
| Working Capital Turnover Ratio | 8 times |
| Cash Revenue from Operations | 25% of Revenue from Operations |
| Gross Profit Ratio | `33 1/3%` |
What is the Gross Profit?
Options
₹ 7,20,000
₹ 3,20,000
₹ 9,60,000
₹ 1,80,000
MCQ
Solution
₹ 3,20,000
Explanation:
Gross Profit = Gross Profit Ratio × Revenue from Operations
= `33 1/3%` of ₹ 9,60,000
= ₹ 3,20,000
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Profltabtltty Ratios - Gross Profit Ratio
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