Dr.

Profit and Loss Account

Particulars

Rs.

To Opening Stock
To Purchases
To Freight Expenses
To Gross Profit cld

10,000
60,000
5,000
50,000
1,25,000

To Operating Expenses:
Office Expenses
Administrative Expenses
Selling and Distribution
Expenses
To Non-Operating Expenses:
Loss on Sale of Fixed Assets
To Net Profit

5,000
15,000
5,000

1,000
34,000

Cr.

Particulars
By Sales
Less : Sales Return
By Closing Stock

Rs.
1,20,000
10,000

Rs.

1,10,000
15,000
1,25,000

By Gross Profit bId

By Non-Trading Income:

50,000

Interest on Investment
Profit on sale of fixed
Assets

5,000

Dividend Received

4,000

60,000

1,000

60,000

Balance Sheet for the year ending 31st Dec. 2001

Liabilities
Share Capital
Reserves
Debenture
Current Liabilities
Profit and Loss Nc

Rs.
15,000
3,000
12,000
20,000
5,000

55,000

Illustration

Assets
~ash in Hand
Cash at Bank
Marketable Securities
Inventories
Sundry Debtors
Prepaid Expense
Land and Building

Rs.
2,000
3,000
5,000
15,000
6,000
4,000
20,000
55,000

The following are the summarized profit and loss account of Sun India Ltd. for the year ending 31 51 Dec.
2003 and the Balance sheet as on that date:

You are required to calculate:

(a) Current Ratio
(b) Liquid Ratio
(c) Gross Profit Ratio
(d) Operating Ratio
(e) Operating Profit Ratio
(f) Net Profit Ratio

Alternative,
Net Operating Profit
Net Operating Profit

Operating Profit Ratio

=
=
=
=
=

if)

Net Profit Ratio

=
<=

Net Profit + Non-Operating Expenses

- Non-Operating Income
Rs. 34,000 + 1,000 (5,000 + 1,000 + 4,000)
Rs. 35,000 - 10.000
25,000
x 100
1,10,000
22.72%
Net Profit (after tax)
Net Sales
34,000
1,10,000

= Rs.25,ooo

30.90 %

x 100

x 100