The net profit ratio can be explained as the ratio of net profit i.e, after tax to net sales. We can find net profit ratio when we know the net profit and net sales.

Given:

Total Sales = $200,000

Sales Return = $15,000

Net Profit = $25,000

We know the formula to calculate net profit ratio = Net Profit / Net Sales * 100

We can know net sales by subtracting total sales with sales return = [$200,000 - $15,000] = $185,000

Inserting the values into the formula = 25,000/185000 * 100

= 0.135 * 100

= 13.5%

Hence, the net profit ratio of ABC company is found to be = 13.5%

In the below online net profit ratio calculator, enter the net profit and net sales in the respective input boxes and then click calculate button to find the answer.

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