If gross profit is the profit from operating activities and operating profit is the deduction of operating expenses from revenue from operations, Then what is the difference between operating profit ratio and gross profit ratio ?

Dear student
Operating profit = gross profit + other operating income - operating expenses
gross profit ratio = gross profit X 100/revenue from operation
operating profit ratio = operating profit X 100/revenue from operation,( difference is other operating income between the two terms)
                                            OR
gross profit = revenue from operation - cost of revenue from operation
operating profit = revenue from operation - operating cost(operating cost = cost of revenue from operation + operating expenses)
 now, you can compare the formula and find the difference between the two terms easily.
Regards

  • 0
What are you looking for?