Gross profit ratio of a company was 25%.Its cash sales were Rs 200000 and credit sales were 90% of the total sales.If the indirect expenses of the company were Rs 20000, calculate Net profit ratio.

Explanation

Net profit ratio =`("net profit" )/("Revenue from opearitons (net sales)")xx100`
`=(Rws 480000)/(Rs 200000)xx100=24%`
Total revenue from operations =Cash sales + credit sales
=Rs 200000+Rs 1800000=Rs 2000000
cash sales =Rs 20000
Credit sales =90% of revenue form operations i.e net sales
It means cash sales were 10% of the revenue from operations i.e net sales
therefore from operationsi.e net sales =`("cash sales")/(10)xx100`
sales (cash + credit)=`(Rs 200000xx100)/(10)=Rs 2000000`
gross profit =`Rs 2000000xx(25)/(100)=Rs 50000`
Net profit =gross profit -Indirect Expenses
=Rs 500000-Rs 2000=Rs 480000