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Calculate operating profit ratio Cash revenue from operation -1,00,000 Net purchases -2,97,000 Credit revenue from operation-3,00,000 Carriage inward-3,000 Finance cost-5,000 Administrative expense-40,000 Profit on sale of fixed asset -10,000 Discount received-7,000?
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Calculate operating profit ratio Cash revenue from operation -1,00,000...
Calculation of Operating Profit Ratio
Operating Profit Ratio is calculated by dividing the operating profit by the net sales. The formula is as follows:
Operating Profit Ratio = (Operating Profit / Net Sales) x 100
Here, the operating profit is the difference between the revenue from operations and the operating expenses.
Calculation of Operating Profit
Operating Profit = Cash Revenue from Operations + Credit Revenue from Operations - Cost of Goods Sold - Carriage Inward - Administrative Expenses
Calculation of Cost of Goods Sold
Cost of Goods Sold = Net Purchases - Discount Received
Now, let's calculate the values given in the question.
Cash Revenue from Operations = 1,00,000
Net Purchases = 2,97,000
Credit Revenue from Operations = 3,00,000
Carriage Inward = 3,000
Finance Cost = 5,000
Administrative Expenses = 40,000
Profit on Sale of Fixed Asset = 10,000
Discount Received = 7,000
Calculation of Cost of Goods Sold
Cost of Goods Sold = 2,97,000 - 7,000 = 2,90,000
Calculation of Operating Profit
Operating Profit = 1,00,000 + 3,00,000 - 2,90,000 - 3,000 - 40,000 = 64,000
Calculation of Operating Profit Ratio
Operating Profit Ratio = (64,000 / (1,00,000 + 3,00,000)) x 100 = 16.00%
Therefore, the Operating Profit Ratio is 16.00%.
Explanation of the Calculation
The Operating Profit Ratio is a measure of the profitability of a company's operations. It shows the percentage of revenue that is left after deducting the operating expenses. In this case, the operating profit is calculated by subtracting the cost of goods sold, carriage inward, and administrative expenses from the revenue from operations. The cost of goods sold is calculated by subtracting the discount received from the net purchases. The operating profit ratio is then calculated by dividing the operating profit by the net sales and multiplying by 100. The result is a percentage that shows how much of the company's revenue is left after deducting the operating expenses.
Operating Profit Ratio is calculated by dividing the operating profit by the net sales. The formula is as follows:
Operating Profit Ratio = (Operating Profit / Net Sales) x 100
Here, the operating profit is the difference between the revenue from operations and the operating expenses.
Calculation of Operating Profit
Operating Profit = Cash Revenue from Operations + Credit Revenue from Operations - Cost of Goods Sold - Carriage Inward - Administrative Expenses
Calculation of Cost of Goods Sold
Cost of Goods Sold = Net Purchases - Discount Received
Now, let's calculate the values given in the question.
Cash Revenue from Operations = 1,00,000
Net Purchases = 2,97,000
Credit Revenue from Operations = 3,00,000
Carriage Inward = 3,000
Finance Cost = 5,000
Administrative Expenses = 40,000
Profit on Sale of Fixed Asset = 10,000
Discount Received = 7,000
Calculation of Cost of Goods Sold
Cost of Goods Sold = 2,97,000 - 7,000 = 2,90,000
Calculation of Operating Profit
Operating Profit = 1,00,000 + 3,00,000 - 2,90,000 - 3,000 - 40,000 = 64,000
Calculation of Operating Profit Ratio
Operating Profit Ratio = (64,000 / (1,00,000 + 3,00,000)) x 100 = 16.00%
Therefore, the Operating Profit Ratio is 16.00%.
Explanation of the Calculation
The Operating Profit Ratio is a measure of the profitability of a company's operations. It shows the percentage of revenue that is left after deducting the operating expenses. In this case, the operating profit is calculated by subtracting the cost of goods sold, carriage inward, and administrative expenses from the revenue from operations. The cost of goods sold is calculated by subtracting the discount received from the net purchases. The operating profit ratio is then calculated by dividing the operating profit by the net sales and multiplying by 100. The result is a percentage that shows how much of the company's revenue is left after deducting the operating expenses.
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Calculate operating profit ratio Cash revenue from operation -1,00,000 Net purchases -2,97,000 Credit revenue from operation-3,00,000 Carriage inward-3,000 Finance cost-5,000 Administrative expense-40,000 Profit on sale of fixed asset -10,000 Discount received-7,000?
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Calculate operating profit ratio Cash revenue from operation -1,00,000 Net purchases -2,97,000 Credit revenue from operation-3,00,000 Carriage inward-3,000 Finance cost-5,000 Administrative expense-40,000 Profit on sale of fixed asset -10,000 Discount received-7,000? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Calculate operating profit ratio Cash revenue from operation -1,00,000 Net purchases -2,97,000 Credit revenue from operation-3,00,000 Carriage inward-3,000 Finance cost-5,000 Administrative expense-40,000 Profit on sale of fixed asset -10,000 Discount received-7,000? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Calculate operating profit ratio Cash revenue from operation -1,00,000 Net purchases -2,97,000 Credit revenue from operation-3,00,000 Carriage inward-3,000 Finance cost-5,000 Administrative expense-40,000 Profit on sale of fixed asset -10,000 Discount received-7,000?.
Calculate operating profit ratio Cash revenue from operation -1,00,000 Net purchases -2,97,000 Credit revenue from operation-3,00,000 Carriage inward-3,000 Finance cost-5,000 Administrative expense-40,000 Profit on sale of fixed asset -10,000 Discount received-7,000? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Calculate operating profit ratio Cash revenue from operation -1,00,000 Net purchases -2,97,000 Credit revenue from operation-3,00,000 Carriage inward-3,000 Finance cost-5,000 Administrative expense-40,000 Profit on sale of fixed asset -10,000 Discount received-7,000? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Calculate operating profit ratio Cash revenue from operation -1,00,000 Net purchases -2,97,000 Credit revenue from operation-3,00,000 Carriage inward-3,000 Finance cost-5,000 Administrative expense-40,000 Profit on sale of fixed asset -10,000 Discount received-7,000?.
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