Find out sales when cost of goods sold is 80,000 and Gross Profit ratio 20%

To find out the sales, you need to understand that the Gross Profit Ratio is calculated by the following formula:

Gross Profit Ratio = (Gross Profit / Sales) * 100%

We can rearrange this formula to find Sales:

Sales = Gross Profit / (Gross Profit Ratio / 100%)

We know that Gross Profit is calculated as:

Gross Profit = Sales - Cost of Goods Sold

We can substitute this into our Sales formula to get:

Sales = (Sales - Cost of Goods Sold) / (Gross Profit Ratio / 100%)

We know that Cost of Goods Sold is 80,000 and Gross Profit Ratio is 20%, so we can substitute these values in:

Sales = (Sales - 80,000) / (20 / 100)

This is a linear equation in Sales, which we can solve to find the value of Sales.

First, multiply both sides by (20 / 100) to get rid of the denominator:

20 / 100 * Sales = Sales - 80,000

This simplifies to:

0.2 * Sales = Sales - 80,000

Rearrange to get Sales on one side:

0.2 * Sales - Sales = -80,000

Simplify to:

-0.8 * Sales = -80,000

Finally, divide both sides by -0.8 to solve for Sales:

Sales = -80,000 / -0.8

Sales = 100,000

So, when the cost of goods sold is 80,000 and the Gross Profit ratio is 20%, the sales are 100,000.

To find out the sales, you can use the formula of Gross Profit Ratio which is:

Gross Profit Ratio = (Gross Profit / Sales) * 100%

Here, you know the Gross Profit Ratio and the Cost of Goods Sold (COGS). But you need the Gross Profit to plug into the formula. You can find the Gross Profit using:

Gross Profit = Sales - COGS

But in this case, you don't know the Sales yet. So, you need to rearrange the Gross Profit Ratio formula to solve for Sales:

Sales = Gross Profit / (Gross Profit Ratio / 100%)

You can find the Gross Profit from the Gross Profit Ratio. The Gross Profit Ratio is the Gross Profit as a percentage of Sales. So, if the Gross Profit Ratio is 20%, that means the Gross Profit is 20% of Sales. Therefore, the COGS is 80% of Sales (since Sales is 100% - Gross Profit Ratio).

So, you can say:

COGS = 0.80 * Sales

And solve for Sales:

Sales = COGS / 0.80

Plug the given COGS into the formula:

Sales = 80,000 / 0.80

Sales = 100,000

So, the Sales would be 100,000.