153 :- Calculate Operating Profit Ratio from the following:
Revenue from Operations (Net Sales) Rs 5,00,000
Cost of Revenue from Operations (Cost of Goods Sold) Rs 2,00,000
Wages Rs 1,00,000
Office and Administration Expenses Rs 50,000
Interest on Borrowings Rs 5,000
Solution :-
Operating Expenses = Office and Administrative Expenses
= Rs 50,000
Gross Profit = Revenue from Operations – Cost of Goods Sold
= 5,00,000 – 2,00,000
= Rs 3,00,000
Operating Profit = Gross Profit – Operating Expenses
= 3,00,000 – 50,000
= Rs 2,50,000
Operating Profit Ratio = Operating Profit/Revenue from Operations x 100
= 2,50,000/5,00,000 x 100
= 50%