# Ratio Analysis - Net Profit ratio - MCQs with answers

## Ratio Analysis - Net Profit ratio - MCQs with answers

1. Net Profit ratio is calculated by

a) (Gross Profit/Gross sales)*100
b) (Gross Profit/Net sales)*100
c) (Net Profit/Net sales)*100
d) None of the above

ANSWER: c) (Net Profit/Net sales)*100

2. If sales is Rs 5, 00,000 and net profit is Rs 1, 20,000 Net Profit ratio is

a) 24%
b) 416%
c) 60%
d) None of the above

3. If sales is Rs 10,00,000, sales returns is Rs 50,000, Profit Before Tax is Rs 2,00,000, Income tax is 40%, Net profit ratio is

a) 12.63%
b) 20%
c) 10%
d) 50%

4. Net operating profit ratio determines ___________ while net profit ratio determines

a) Overall efficiency of the business, working efficiency of the management

b) Working efficiency of the management, overll efficiency of the business

c) Overall efficiency of the external market, working efficiency of the internal management

d) None of the above

ANSWER:b) Working efficiency of the management, overll efficiency of the business

5. Operating ratio is calculated by

a) (Operating Cost/Gross sales)*100
b) (Operating Cost/Gross sales)*100
c) (Operating cost/Net sales)*100
d) None of the above

ANSWER: c) (Operating cost/Net sales)*100

6. Determine Operating ratio, if operating expenses is Rs 60,000, Sales is Rs 9,40,000, Sales Return is Rs 40,000 and Cost of net goods sold is Rs 6,60,000.

a) 80%
b) 15%
c) 25%
d) 11%

7. Which of the following is expenses ratio?

A) Administrative expenses ratio
B) Selling and Distribution expenses ratio
C) Factory expenses ratio
D) Finance Expenses ratio

a) A, B and D
b) A, C and D
c) A, B and C
d) A, B , C, D