Question
A company earns ₹18,00,000 in revenue and incurs expenses of ₹4,00,000 in salaries, ₹6,00,000 in cost of goods sold, ₹1,00,000 in rent, ₹3,00,000 in purchases and ₹50,000 in depreciation. What is the Net Profit?
Solution
Total Expenses = Salaries + COGS+ Rent + Depreciation = ₹4,00,000 + ₹6,00,000 + ₹1,00,000 + ₹50,000 = ₹11,50,000
Net Profit = Revenue – total expenses = ₹18,00,000 – ₹11,50,000 = ₹6,50,000 Please note that purchases is ignored as it is already a part of CoGS.
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