Question:
If Gross Profit is \( ₹80,000 \) and Net Sales are \( ₹4,00,000 \), the Gross Profit Ratio will be:
If Gross Profit is \( ₹80,000 \) and Net Sales are \( ₹4,00,000 \), the Gross Profit Ratio will be:
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Higher Gross Profit Ratio indicates better trading efficiency of the business.
Updated On: May 31, 2026
- \(10%\)
- \(15%\)
- \(20%\)
- \(25%\)
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The Correct Option is C
Solution and Explanation
Concept:
Gross Profit Ratio indicates the relationship between gross profit and net sales.
\[
\text{Gross Profit Ratio} = \frac{\text{Gross Profit}}{\text{Net Sales}} \times 100
\]
Step 1: Substitute the values.
\[ \text{Gross Profit Ratio} = \frac{80,000}{4,00,000} \times 100 \] \[ = 20% \] Hence, \[ \boxed{20%} \]
Step 1: Substitute the values.
\[ \text{Gross Profit Ratio} = \frac{80,000}{4,00,000} \times 100 \] \[ = 20% \] Hence, \[ \boxed{20%} \]
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