Question
From the following, calculate the Operating Profit
Ratio: Net Sales ₹5,00,000, Cost of Goods Sold ₹3,00,000, Operating Expenses ₹1,00,000, Non-operating Income ₹20,000.Solution
Operating Profit = Net Sales - Cost of Goods Sold - Operating Expenses = ₹5,00,000 - ₹3,00,000 - ₹1,00,000 = ₹1,00,000. Operating Profit Ratio = (Operating Profit / Net Sales) * 100 = (₹1,00,000 / ₹5,00,000) * 100 = 20%.
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