Gross profit ratio of a company was 25%. Its credit revenue from operations was Rs. 20,00,000 and its cash revenue from operations was 20% of the total revenue from operations. If the indirect expenses of the company were Rs. 50.000, Calculate its net profit.

The correct option is 5,75,000.

Here is the step-by-step calculation to find the net profit of the company:

Step 1: Calculate the Total Revenue from Operations
Let the Total Revenue from Operations be represented by $R$.
The problem states that Cash Revenue from operations is 20% of the Total Revenue. Therefore, the remaining portion of the Total Revenue must be Credit Revenue from operations.
Credit Revenue from Operations = Total Revenue - Cash Revenue
Credit Revenue from Operations = 100% - 20% = 80% of Total Revenue

Given that Credit Revenue from Operations is Rs. 20,00,000, we can write:
$$80\%―\text{of }R=\text{Rs. }\mathrm{20,00,000}$$
$$0.80\times R=\mathrm{20,00,000}$$
$$R=\frac{\mathrm{20,00,000}}{0.80}=\text{Rs. }\mathrm{25,00,000}$$
So, the Total Revenue from Operations is Rs. 25,00,000.

Step 2: Calculate the Gross Profit
The Gross Profit ratio is given as 25% of the Total Revenue from operations.
$$\text{Gross Profit}=25\%\times \text{Total Revenue}$$
$$\text{Gross Profit}=\frac{25}{100}\times \mathrm{25,00,000}=\text{Rs. }\mathrm{6,25,000}$$
Thus, the Gross Profit of the company is Rs. 6,25,000.

Step 3: Calculate the Net Profit
Net Profit is calculated by deducting indirect expenses from the Gross Profit.
Given that the Indirect Expenses are Rs. 50,000:
$$\text{Net Profit}=\text{Gross Profit}-\text{Indirect Expenses}$$
$$\text{Net Profit}=\mathrm{6,25,000}-\mathrm{50,000}=\text{Rs. }\mathrm{5,75,000}$$
Therefore, the Net Profit of the company is Rs. 5,75,000.