Question
A company has sales ₹20,00,000, cost of goods sold
₹12,00,000, operating expenses ₹4,00,000, interest ₹50,000, tax 30%. Net profit after tax is:Solution
Gross profit = 20,00,000 − 12,00,000 = 8,00,000. Operating profit = 8,00,000 − 4,00,000 = 4,00,000. Profit before tax (PBT) = 4,00,000 − 50,000 = 3,50,000. Tax = 30% of 3,50,000 = 1,05,000. PAT = 3,50,000 − 1,05,000 = ₹2,45,000.
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