158 :- Calculate Operating Profit Ratio in each of the following alternative cases :
Case 1 : Revenue from Operations (Net Sales) Rs 20,00,000; Operating Profit Rs 3,00,000.
Case 2 : Revenue from Operations (Net Sales) Rs 6,00,000; Operating Cost Rs 5,10,000.
Case 3 : Revenue from Operations (Net Sales) Rs 3,60,000; Gross Profit 20% on Sales; Operating Expenses Rs 18,000.
Case 4 : Revenue from Operations (Net Sales) Rs 4,50,000; Cost of Revenue from Operations Rs 3,60,000. Operating Expenses Rs 22,500.
Case 5 : Cost of Goods Sold,I.e, Cost of Revenue from Operations Rs 4,00,000. Gross Profit 20% on Sales; Operating Expenses Rs 25,000.
Solution :-
CASE 1
Operating Profit Ratio = Operating Profit/Revenue from Operation x 100
= 3,00,000/20,00,000 x 100
= 15%
CASE 2
Operating Profit = Revenue from Operations – Operating Cost
= 6,00,000 – 5,10,000
= Rs 90,000
Operating Profit Ratio = Operating Profit/Revenue from Operation x 100
= 90,000/6,00,000 x 100
= 15%
CASE 3
Gross Profit = 20% on Sale
= 20/100 x 3,60,000
= Rs 72,000
Operating Profit = Gross Profit – Operating Expenses
= 72,000 – 18,000
= Rs 54,000
Operating Profit Ratio = Operating Profit/Revenue from Operation x 100
= 54,000/3,60,000 x 100
= 15%
CASE 4
Gross Profit = Revenue from Operation – Cost of Revenue from Operation
= 4,50,000 – 3,60,000
= Rs 90,000
Operating Profit = Gross Profit – Operating Expenses
= 90,000 – 22,500
= Rs 67,500
Operating Profit Ratio = Operating Profit/Revenue from Operation x 100
= 67,500/4,50,000 x 100
= 15%
CASE 5
Let Revenue from Operation be x
Gross Profit = Revenue from Operation – Cost of Revenue from Operation
20x/100 = x – 4,00,000
80x/100 = 4,00,000
x = Rs 5,00,000
Gross Profit = 5,00,000 – 4,00,000
= Rs 1,00,000
Operating Profit = Gross Profit – Operating Expenses
= 1,00,000 – 25,000
= Rs 75,000
Operating Profit Ratio = Operating Profit/Revenue from Operation x 100
= 75,000/5,00,000 x 100
= 15%