Q.Calculate Gross Profit Ratio from the following : Revenue from operations ₹ 2,50,000, cost of revenue from operations ₹ 2,10,000 and purchases ₹ 1,80,000.

Gross profit = 2,50,000 - 2,10,000 = 40,000; Gross profit ratio = 40,000/2,50,000 x 100 = 16%.

The gross profit ratio is a profitability ratio in the Tamil Nadu HSC Accountancy syllabus that shows gross profit as a percentage of revenue from operations (net sales).

Step 1 - Gross profit

Gross profit = Revenue from operations - Cost of revenue from operations = 2,50,000 - 2,10,000 = 40,000

Step 2 - Apply the formula

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