A firm has Capital of Rs. 10,00,000; Sales of Rs. 5,00,000; Gross Profit of Rs. 2,00,000 and Expenses…
Net profit is gross profit less expenses: Rs. 2,00,000 − Rs. 1,00,000 = Rs. 1,00,000. The net profit ratio is Rs. 1,00,000 ÷ Rs. 5,00,000 × 100 = 20%; capital is not the…
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A firm has Capital of Rs. 10,00,000; Sales of Rs. 5,00,000; Gross Profit of Rs. 2,00,000 and Expenses of Rs. 1,00,000. What is the Net Profit Ratio?
Answer and explanation
Correct answer A
Net profit is gross profit less expenses: Rs. 2,00,000 − Rs. 1,00,000 = Rs. 1,00,000. The net profit ratio is Rs. 1,00,000 ÷ Rs. 5,00,000 × 100 = 20%; capital is not the denominator of this ratio.
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Tamil Nadu SET (TNSET)