Using Sales ₹24,00,000, Gross Profit ₹6,00,000, Net Profit ₹90,000, cost of goods sold ₹18,00,000 and operating (office + selling) expenses ₹4,50,000: GP Ratio 25%, Operating Ratio 93.75%, Net Profit Ratio 3.75%, and Current Ratio 1.67:1.

Working Note 1 — Cost of Goods Sold

COGS = Opening Stock + Purchases + Wages − Closing Stock

= 4,00,000 + 18,00,000 + 2,00,000 − 6,00,000 = ₹18,00,000.

Working Note 2 — Operating expenses (exclude non-operating finance expenses)

Operating expenses = Office Expenses + Selling Expenses = 2,50,000 + 2,00,000 = ₹4,50,000.

(Finance Expenses ₹60,000 are non-operating and are excluded from the operating ratio.)

Working Note 3 — Current assets and current liabilities

Ratio calculations

| Ratio | Formula | Working | Result |

| --- | --- | --- | --- | …