Queery related to net profit ratio.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 October 2012 Hi..

I've a doubt in Net Profit Ratio.
What we've take in Denominator in Net Profit Ratio if my Income is coming from sales or any other Income as well.
Suppose,
1st Case,My sales is ₹10,000 & Indirect Income is ₹ 2,000 & Net Profit is ₹4,000 then what i've take in Denominator Only sales or Sales + Indirect Income.

2nd case, If Major Part of my Income is Coming from Commission Income.
Suppose, My Commission Income is ₹14,00,000 & My sales is ₹50,000 & My Net Profit is ₹2,00,000 then suggest me what i've take in Denominator Sales or Sales + Commission Income or Only Commission Income.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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04 October 2012 There is no hard and fast rules for calculating ratio's for the purpose of tax audit for want of definitions for turn over, net profit etc. Therefore, ICAI suggests to enclose working of all these factors while calculating ratios for tax audit purposes.

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