Q1. [2] § (III) Profitability Ratios § Illustration
Calcualte the Gross Profit Ratio from the following information :
Previously asked in CBSE board exam
2023 92 Q18
Generated by claude-sonnet-4-6 · 2026-06-15 07:08 · grounding rag
Model Answer
Given:
- Gross Profit = ₹30,000
- Net Sales = ₹1,00,000
Formula:
$$\text{Gross Profit Ratio} = \frac{\text{Gross Profit}}{\text{Net Sales}} \times 100$$
$$= \frac{30,000}{1,00,000} \times 100 = \textbf{30\%}$$
Source: Profitability Ratios, Chapter 10
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Explanation
- The examiner awards 1 mark for the formula and 1 mark for the correct calculation/answer.
- Gross Profit (₹30,000) and Net Sales (₹1,00,000) are directly read from the Trading Account — no further calculation needed.
- Always express Gross Profit Ratio as a percentage; forgetting the "× 100" or the "%" sign can cost a mark.
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