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Ratio Analysis 4.5
Gross Profit = Revenue from Operations – Cost of Revenue from Operations Cost of Revenue from Operations = Cost of Materials Consumed (Stock-in-Trade + Purchases of Stock-in-Trade + Direct Expenses) + Changes in Inventories of WIP and Finished Goods + Purchases of Stock-in-Trade Revenue from Operations = Credit Revenue from Operations + Cash Revenue from Operations Net Sales = Total Sales – Sales Return Net Profit = Revenue from Operations – Cost of
% % – Tax % % ` Per Share company. Times % compared.
The ratio indicates the relationship between gross profit and revenue from operations. A higher ratio indicates low Cost of Revenue from Operations (Cost of Goods The ratio indicates the overall efficiency of the business. A higher Net Profit Ratio is better for the business. The ratio is calculated to judge the operational efficiency of the business. A decline in the Operating Ratio is better because it would leave a high margin, which mea
×100 Sold). ×100 ×100 100 × an ¥100
Gross Profit from Operations Net Profit Revenue from Operations Cost of Revenue from Operations (Cost of Goods Sold) + Operating Expenses Revenue from Operations Operating Profit Revenue from Operations Net Profit after Tax – Preference Dividend Number of Equity Shares Value of Martket Equity Share EarningPer Share Net Profit before Interest and Tax Capital Employed
Revenue Net
IV. Profitability Ratios Gross Profit Ratio 1. Net Profit Ratio 2. Operating Ratio 3. Operating Profit Ratio 4. Earning Per Share 5. Price Earning Ratio 6. Return on Investment 7.
