The correct answer is C. 10%.
Net profit ratio is a measure of a company’s profitability. It is calculated by dividing net profit by net sales. Net profit is equal to gross profit minus expenses. Gross profit is equal to sales minus cost of goods sold.
In this case, the firm has a net profit of Rs. 1,00,000, net sales of Rs. 5,00,000, and a gross profit of Rs. 2,00,000. Therefore, the net profit ratio is 10%.
Option A is incorrect because it is the gross profit ratio. Gross profit ratio is calculated by dividing gross profit by net sales. In this case, the gross profit ratio is 40%.
Option B is incorrect because it is the profit margin. Profit margin is calculated by dividing net profit by sales. In this case, the profit margin is 20%.
Option D is incorrect because it is the return on assets. Return on assets is calculated by dividing net profit by average total assets. In this case, the return on assets is 10%.