Question

Calculate gross profit ratio: 

Sales Rs. 6,50,000; Cost of goods sold Rs. 4,80,000; 

Sales returns Rs. 50,000.

Answer 1

Gross profit ratio = (Gross profit)/Sales x 100 

Sales = Sales – Sales returns 

= Rs. 6,50,000 – Rs.  50,000 

= Rs. 6,00,000 

Gross profit = Sales – Cost of goods sold 

= Rs. 6,00,000 – 4,80,000 

= Rs. 1,20,000 

Gross profit ratio = 1,20,000/6,00,000 x 100 

= 20%