Comprehension

The following graph shows the sales of the company IVP limited for the years 1994 to 1999. The sales of the company have risen from Rs. 100=00 crores in 1994 to Rs. 680=00 crores in 1999. The Net profit of the company has also gone up from Rs. 2.20 crores in 1994 to Rs. 12=00 crores in the year 1999. Net profit is calculated as surplus sales over the total cost for the company.

Question: 1

The highest percentage of growth in sales, relative to the previous year, occurred in:

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In growth rate questions, always compare the slope of the curves in the graph, as a steeper slope indicates a higher growth rate.

Updated On: Mar 7, 2026

1995-96
1996-97
1997-98
1998-99

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The Correct Option is D

Solution and Explanation

From the graph, we can calculate the percentage growth in sales for each year using the following formula: \[ \text{Growth Percentage} = \frac{\text{Sales in Current Year} - \text{Sales in Previous Year}}{\text{Sales in Previous Year}} \times 100 \] The highest growth in sales occurred between 1998-99, as seen in the steep rise in the sales curve compared to the other years. Therefore, the Correct Answer is (4) 1998-99.

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Question: 2

The highest percentage growth in net profit, relative to the previous year, was achieved in:

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Look at the net profit curve closely to identify the steepest rise, which indicates the highest growth.

Updated On: Aug 5, 2025

1998-99
1997-98
1996-97
1995-96

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The Correct Option is A

Solution and Explanation

The percentage growth in net profit can be calculated using the same formula as for sales. Upon reviewing the net profit line on the graph, we observe that the highest growth in net profit occurred between 1998-99, where the increase is substantial compared to the other years. Therefore, the Correct Answer is (1) 1998-99.

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Question: 3

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

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In profitability questions, observe the net profit and sales values to calculate the ratio for each year and identify the year with the highest ratio.

Updated On: Mar 7, 2026

1998-99
1997-98
1994-95
1996-97

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The Correct Option is A

Solution and Explanation

Profitability is calculated as the ratio of net profit to sales. From the provided graph, the highest profitability is observed in 1998-99, where the net profit-to-sales ratio is the highest compared to the other years. Therefore, the Correct Answer is (1) 1998-99.

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Question: 4

With profitability as defined in question 147, it can be concluded that:

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For trend-based profitability questions, observe the general direction of the profitability curve over the years to determine if it's increasing, decreasing, or constant.

Updated On: Mar 7, 2026

Profitability is non-decreasing during the five years from 1994-95 to 1998-99
Profitability is non-increasing during the five years from 1994-95 to 1998-99
Profitability remained constant during the five years from 1994-95 to 1998-99
None of the above

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The Correct Option is A

Solution and Explanation

Based on the graph and the profitability calculation, the profitability of IVP Ltd. shows an increasing trend or at least remains the same during the five years from 1994-95 to 1998-99. Therefore, the correct conclusion is (1) Profitability is non-decreasing during the five years from 1994-95 to 1998-99.

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