n NISM Certifications
XV NISM Series XV
Medium

Calculate the Sales of a business if EBITDA is 40% of Sales, Net Profit is 20% of EBITDA, Dividend per Share is Rs. 2, Dividend Payout ratio is 40%, and the number of outstanding shares is 10,000.

Practice question from NISM XV Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Rs. 480,000

  2. B

    Rs. 574,000

  3. Rs. 625,000

    Correct answer

  4. D

    Rs. 755,000

Why this is the answer

Total Dividend = 2 × 10,000 = Rs. 20,000. Dividend Payout = 40% → Net Profit = 20,000 ÷ 0.4 = Rs. 50,000. Net Profit = 20% of EBITDA → EBITDA = 50,000 ÷ 0.2 = Rs. 250,000. EBITDA = 40% of Sales → Sales = 250,000 ÷ 0.4 = Rs. 625,000.

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