Ratio Calculation From Financial Statement
Profit and Loss a/c of Beta Manufacturing Company for the year ended 31st March 2010.
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You are required to find out:
d) Operating #Net Profit to Net Sales Ratio
a. GROSS FORFIT RATIO
= Gross profit ÷ #Sales × 100
= 50,000 ÷ 1,60,000 × 100
= 31.25 %
b. #NET PROFIT RATIO
= Net profit ÷ Sales × 100
= 28,000 ÷ 1,60,000 × 100
= 17.5 %
c. OPERATING RATIO
= #Cost of goods sold + Operating expenses ÷ Sales × 100
Cost of goos sold = Sales – Gross profit
= 1,60,000 – 50,000
= Rs. 1,10,000
Operating expenses = 4,000 + 22,800 + 1,200 = Rs. 28,000
Operating ratio = 1,10,000 + 28,000 ÷ 1,60,000 × 100
= 86.25 %
d. OPERATING NET PROFIT TO NET SALES RATIO
= Operating Profit ÷ Sales × 100
Operating profit = Net profit + Non-Operating expenses – Non operating income
= 28,000 + 800 – 4,800 = Rs. 32,000
Operating Net Profit to Net Sales Ratio = 32,000 ÷ 1,60,000 × 100
= 20 %
What is a Financial statement?
It is an organised collection of data according to logical and consistent #accounting procedure. It combines statements of balance sheet, income and retained earnings. These are prepared for the purpose of presenting a periodical report on the program of investment status and the results achieved i.e., the balance sheet and P& L a/c.
Objectives of Financial Statement Analysis:
Financial Statement Analysis Tools
Types of Financial Analysis
Limitations