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    Question

    Refer to the following information to answer the next 4 questions (Q15 to Q18):

    Calculate Net profit to capital

    ratio.
    A 16.67% Correct Answer Incorrect Answer
    B 40% Correct Answer Incorrect Answer
    C 20% Correct Answer Incorrect Answer
    D 25% Correct Answer Incorrect Answer
    E 18% Correct Answer Incorrect Answer

    Solution

    Net profit to capital ratio (Also called as Return on investment) Net Profit/Capital Employed = 2,50,000/15,00,000 Net Profit = Gross Profit – Indirect Expenses = 6,00,000 – 3,50,000 = 2,50,000 Gross Profit= Net Sales + Closing Stock – Opening Stock – Purchases – Direct Expenses = 12,00,000 + 1,00,000 – 20,000 – 6,30,000 – 50,000 = 6,00,000

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