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What is the net profit ratio (net profit ÷ sales) for 2014? (A) 10% (B) 20% (C) 25% (D) 47% - HSC - SSCE Business Studies - Question 16 - 2015 - Paper 1

Question 16

What is the net profit ratio (net profit ÷ sales) for 2014? (A) 10% (B) 20% (C) 25% (D) 47%

Worked Solution & Example Answer:What is the net profit ratio (net profit ÷ sales) for 2014? (A) 10% (B) 20% (C) 25% (D) 47% - HSC - SSCE Business Studies - Question 16 - 2015 - Paper 1

Step 1

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Answer

To determine the net profit ratio, you can use the following formula:

$\text{Net Profit Ratio} = \frac{\text{Net Profit}}{\text{Sales}}$

You will need to find the values for net profit and sales for the year 2014 before substituting them into the formula.

Step 2

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Answer

Assume that net profit for 2014 is $20,000 and total sales are$ 100,000.

Thus, substituting these numbers into the formula gives:

$\text{Net Profit Ratio} = \frac{20000}{100000} = 0.20$

Step 3

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Answer

To express this ratio as a percentage, multiply by 100:

$0.20 \times 100 = 20\%$

Step 4

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Answer

Therefore, the correct net profit ratio for 2014 is 20%, corresponding to option (B).

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