Directions: These questions are based on the situation given below: The figure below presents sales and net profit, in Rs. Crores, of IVP Ltd for the five years from 1994-95 to 1998-99. During this period, the sales increased from Rs. 100 Crores to Rs. 680 Crores. Correspondingly, the net profit increased from Rs. 2 Crores to Rs. 12 Crores. Net profit is defined as the excess of sales over total costs.

What is the correct answer?


Defining profitability as the ratio of net profit to sales, IVP Ltd. recorded the highest profitability in

A. 1998-99

B. 1997-98

C. 1994-95

D. 1996-97

Correct Answer :

B. 1997-98

Gap between profit and sales is largest with profit being above sales substantially as compared to other years. Hence the highest profitability was recorded in 97-98.

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