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What is N.P. Ratio?

Post category:Accountancy
Reading time:1 mins read

SOLUTION

It measures the margin of net profit available on Revenue from Operations. The formula for calculating this ratio is:
Net Profit Ratio = Net Profit / Net Revenue from Operations x 100

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Shiv, Mohan and Gopal are partners sharing profits and losses in the ratio of 2: 2: 1 respectively. Shiv is entitled to a commission of 10% on the net profit. Net profit for the year is Rs. 1,10,000. Determine the amount of commission payable to Shiv.

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State the ratio in which the partners share profits or losses on revaluation of assets and liabilities, when there is a change in profit sharing ratio amongst existing partners?

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