# 12th | Ts grewal 2021-2022 Question 136 to 140 | ch:4 Accounting Ratios

#### Question 136:

Calculate Operating Profit Ratio, in each of the following alternative cases:
Case 1:  Revenue from Operations (Net Sales)
` 20,00,000; Operating Profit  ` 3,00,000.
Case 2:  Revenue from Operations (Net Sales)  ` 6,00,000; Operating Cost
` 5,10,000.
Case 4:  Revenue from Operations (Net Sales)
` 3,60,000; Gross Profit 20% on Sales; Operating Expenses  ` 18,000
Case 4: Revenue from Operations (Net Sales)
` 4,50,000; Cost of Revenue from Operations  ` 3,60,000; Operating Expenses  ` 22,500.
Case 5: Cost of Goods Sold, i.e., Cost of Revenue from Operations  ` 4,00,000; Gross Profit 20% on Sales; Operating Expenses
` 25,000.

Case 1

Operating Ratio= Operating Cost/ Net Sales ×100

=3,00,000/20,00,000× 100=15%

Case II

Operating Profit = Net Sales- Operating Cost

=6,00,000-5,10,000

=90,000

Operating Ratio= Operating Cost/ Net Sales ×100

=90,000/6,00,000× 100=15%

Case III

Net Sales = 3,60,000

Gross Profit = 20% on Sales

Gross Profit =20/100×3,60,000=72,000

Operating Profit = Net Sales- Operating Cost

=72,000-18,000

=54,000

Operating Ratio= Operating Cost/ Net Sales ×100

=54,000/3,60,000× 100=15%

Case IV

Net Sales = 4,50,000

Operating Profit = Net Sales- Cost of goods sold-Operation expenses

=4,50,000-3,60,000-22,500

=67,500

Operating Ratio= Operating Cost/ Net Sales ×100

=67,500/4,50,000× 100=15%

Case V

Gross profit = 20% on sales

Let Sales =x

Gross profit=x×20/100=20x/100

Sales = Cost Goods Sold + Gross Profit

x=4,00000+20x/100

Or, 80x/100=4,00,000

Or, x=5,00,000

Sales = 5,00,000

Operating Cost = Cost of Goods Sold+ Operating Expenses

=4,00,000+25,000=4,25,000

Operating Profit = Net Sales- Cost of goods sold-Operation expenses

=5,00,000-4,00,000-25,000

=75,000

Operating Profit Ratio = Operating Profit/ Net Sales×100

=75,000×100/5,00,000=15%

#### (a)

No Change

Both purchases and closing inventory will increase and hence Cost of Revenue from Operations win remain unchanged.

#### (b)

No Change

Both purchases and closing inventory wiu decrease and hence Cost of Revenue from Operations will remain unchanged.

#### (c)

No Change

Revenue from Operations will increase but closing inventory will decrease by the same percentage (not by the same amount). Therefore, Cost of Revenue from Operations will increase by the same percentage as the Revenue from Operations increase.

#### (d)

No Change

Both purchases and dosing inventory will decrease and hence Cost of Revenue from Operations will remain unchanged.

#### Question 138:

Cash Sales  ` 2,20,000; Credit Sales  ` 3,00,000; Sales Return  ` 20,000; Gross Profit  ` 1,00,000; Operating Expenses  ` 25,000; Non-operating incomes  ` 30,000; Non-operating Expenses  ` 5,000. Calculate Net Profit Ratio.

Net Sales= Cash Sales  + Credit Sales - Sales Return

= 2,20,000+3,00,000-20,000

= 5,00,000

Net Profit = Gross Profit - Operating Expenses - Non-operating Expenses + Non-operating incomes

= 1,00,000-25,000-5,000+30,000

= 1,00,000

Net Profit Ratio= Net profit ×100/Net Sales

= 1,00,000×100/5,00,000

= 20%

#### Question 139:

Revenue from Operations, i.e., Net Sales  ` 6,00,000. Calculate Net Profit Ratio.

Net Sales = 6,00,000

Net profit = 60,000

Net Profit Ratio= Net profit ×100/Net Sales

= 60,000×100/6,00,000

= 10%

#### Question 140:

Revenue from Operations, i.e., Net Sales  ` 8,20,000; Return  ` 10,000; Cost of Revenue from Operations (Cost of Goods Sold)  ` 5,20,000; Operating Expenses  ` 2,09,000; Interest on Debentures  ` 40,500; Gain (Profit) on Sale of a Fixed Asset  ` 81,000. Calculate Net Profit Ratio.

Net Sales=  ` 8,20,000

Gross Profit = Net Sales - Cost of Goods Sold

= 8,20,000 - 5,20,000

=  ` 3,00,000

Net Profit = Gross Profit - Operating Expenses - Interest on Debentures + Profit on Sale of Fixed Asset

= 3,00,000 - 2,09,000 - 40,500 + 81,000

= ` 1,31,500

Net Profit Ratio=Net Profit/Net Sales×100

=1,31,500/8,20,000×100

=16.04%