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Question
Calculate operating profit ratio under the following cases.
Case 1: Revenue from operations ₹ 8,00,000, Operating profit ₹ 2,00,000.
Case 2: Revenue from operations ₹ 20,00,000, Operating cost ₹ 14,00,000.
Case 3: Revenue from operations ₹ 10,00,000, Gross profit 25% on revenue from operations, Operating expenses ₹ 1,00,000.
Solution
Operating profit ratio = `"Operating Profit"/"Revenue from operation" xx 100`
Case 1:
Operating profit ratio = `200000/800000 xx 100` = 25%
Case 2:
Operating profit = Revenue from operation - Operating Cost
Operating profit ratio = 20,00,000 - 14,00,000 = Rs. 6,00,000
Operating profit ratio = `600000/2000000 xx 100` = 30%
Case 3:
Gross profit = `10,00,000 xx 25/100` = Rs. 2,50,000
Operating profit = Gross profit - Operating expenses
= 2,50,000 - 1,00,000
= Rs. 1,50,000
Operating profit ratio = `150000/1000000 xx 100` = 15%
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| Particulars | ₹ |
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| 1. Shareholder's Funds | |
| Equity share capital | 4,00,000 |
| 2. Non- Current liabilities | |
| Long term borrowings | 2,00,000 |
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| (c) Other current liabilities Expenses Payable | 15,000 |
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| a) Share capital | |
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