Gross profit = Sales – Cost of goods sold
= 10,00,000 – 4,20,000
= ₹ 5,80,000
Net profit = Gross profit – Administrative expenses – Selling and Distribution expenses – Indirect expenses – Interest on debentures
= 5,80,000 – 1,00,000 – 80,000 – 30,000 – 40,000
= ₹ 3,30,000
Net profit ratio = \(\frac{Net\,profit}{Sales}\times100
\)
= \(\frac{3,30,000}{10,00,000}\times100\)
= 33%