Practice Operating Profit Ratio (1.4.4.4) - Ratio Analysis

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6 sample questions

Question 1.
Define Operating Profit Ratio.
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Think about what profit relates to company operations.
Question 2.
What is included in Operating Profit?
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It's before interest and tax!
3Question 3.
What does the Operating Profit Ratio measure?
- Total profits
- Operational efficiency
- Net income
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Focus on the core functions of a business.
4Question 4.
True or False: A higher Operating Profit Ratio is always better.
- True
- False
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Consider what the ratio signifies.
Question 5.
A new coffee shop has net sales of ₹300,000 and operating profit of ₹60,000. Calculate the Operating Profit Ratio and discuss what this implies for the business.
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Break it down using the formula discussed.
Question 6.
If the OPR for two companies in the fast-food industry are 22% and 18%, what might this indicate about their operational efficiency?
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Consider how profitability ratios reflect company performance.

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