Financial Statements

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Financial Statements

Calculate Gross profit ratio from following info

Revenue from operations 3,40,000
Cost of revenue from operations 1,20,000

Revenue from operations	3,40,000
Cost of revenue from operations	1,20,000

27.5%

64.71%

18.3%

15.55%

✅ Correct Option: 2

Given:

Revenue from operations = ₹3,40,000
Cost of revenue from operations = ₹1,20,000

Calculation of Gross Profit:

Gross Profit = Revenue from operations - Cost of revenue from operations

Gross Profit = 3,40,000 - 1,20,000 = ₹2,20,000

Calculation of Gross Profit Ratio:

The formula is: Gross Profit Ratio = $\frac{\text{Gross Profit}}{\text{Revenue from operations}}$ × 100

Gross Profit Ratio = $\frac{2,20,000}{3,40,000}$ × 100

Gross Profit Ratio = 0.6471 × 100 = 64.71%

The gross profit ratio of 64.71% indicates that for every ₹100 of revenue, the business earns a gross profit of ₹64.71 after covering the cost of revenue from operations.

2026: 21 May Shift 2

Match the LIST-I with LIST-II

LIST-I		LIST-II
A.	The ratio provides a measure of the capacity of the business to meet its short-term obligations without any flaw.	I. Total Assets to Debt Ratio
B.	This ratio measures the extent of the coverage of long-term debts by assets.	II. Interest Coverage Ratio
C.	This ratio indicates the number of times receivables are turned over and converted into cash in an accounting period.	III. Quick Ratio
D.	It is a ratio which deals with the servicing of interest on loans. It is a measure of security of interest payable on long-term debts.	IV. Trade Receivables Turnover Ratio

Choose the correct answer from the options given below:

2026: 19 May Shift 1

A trader carries an average inventory of Rs. 40,000. His inventory turnover ratio is 8 times. If he sells goods at a profit of 20% on Revenue from operations, find out the gross profit.

2026: 29 May Shift 2

The current ratio is 2 : 1. Which of the following transactions would improve, reduce or change the current ratio? Match List-I with List-II

LIST-I		LIST-II
A.	Payment of unclaimed dividend	I.	Improve
B.	Purchase of Machinery against Issue of Shares	II.	Reduce
C.	Sale of goods on credit	III.	Will not be recorded
D.	Purchased goods on credit	IV.	Does not Change

Choose the correct answer from the options given below:

2022: 30 Aug Shift 2

What are the different types of liquidity ratios

A. Interest coverage ratio

B. Current ratio

C. Inventory turnover ratio

D. Gross profit ratio

E. Acid test ratio

Choose the correct answer from the options given below:

2024

Calculate Trade Receivables Turnover Ratio.

2025: 14 May Shift 1

The current ratio is 2.5 : 1. Current assets are Rs. 50,000 and current liabilities are Rs. 20,000. How much must be the reduction in the current assets to bring the ratio to 2 : 1

Calculate Gross profit ratio from following info Revenue from operations3,40,000Cost of revenue from operations1,20,000

Solution

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Calculate Gross profit ratio from following info

Revenue from operations 3,40,000
Cost of revenue from operations 1,20,000