Question

Compute the cost of goods sold ratio, administrative expenses ratio and selling expenses ratio from the following information: 

Net sales Rs. 75,00,000 

Cost of goods sold Rs. 52,00,000 

Administrative expenses Rs. 3,00,000 

Sales expenses Rs. 4,50,000

Answer 1

1. Cost of goods sold ratio = (Cost Of Goods Sold /Net Sales ) × 100 

= (Rs. 52,00,000/ 75,00,000) × 100

= 69.33%

2. Administrative expenses ratio = (Administrative expenses /Net sales ) × 100 

= (3,00,000/ 75,00,000) × 100

= 4%

3. Selling expenses ratio = (Selling expenses /Net sales ) × 100

= (4,50,000/ 75,00,000) × 100

= 6%