Question

X, Y and Z are partners sharing profits in the ratio of 5 : 4 : 3. X retires from the firm and it is decided that new profit sharing ratio between Y and Z will be same as existing between X and Y. Calculate new ratio and gaining ratio.

Answer 1

Old ratio = X : Y : Z = 5 : 4 : 3

X retires. It is given that the new ratio of Y : Z is the same as the existing ratio of X : Y.

So,

New ratio of Y : Z = 5 : 4

Gaining Ratio:

Y's gain:

`5/9 - 4/12 = 5/9 - 1/3 = 2/9`

Z's gain:

`4/9 - 3/12 = 4/9 - 1/4 = 7/36`

Therefore,

`2/9 : 7/36 = 8 : 7`