Multiple choice

Directions: Choose the correct option for the given question.

Few items of P/L account of a company are

Sales (Rs.) 1,60,000 Closing stock 38,000 Non-operating Expenses 800 Non-operating Income 4,800 Net Profit 28,000 What is the Operating Profit Ratio?

  1. 18%

  2. 20%

  3. 15%

  4. 57%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Operating Profit Ratio = Operating Profit / Sales × 100. Operating profit excludes non-operating items (income and expenses). Operating profit = Net profit + Non-operating expenses - Non-operating income = 28000 + 800 - 4800 = Rs. 24000. Ratio = 24000/160000 × 100 = 15%.

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