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Question
Calculate the operating ratio from the information given below.
| Particulars | (₹) |
| Opening Inventory | 20,000 |
| Closing inventory | 9,000 |
| Purchases | 80,000 |
| Wages | 8,000 |
| Carriage inward | 3,000 |
| Depreciation | 18,000 |
| Amortization | 6,000 |
| Gross Profit | 48,000 |
Numerical
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Solution
Cost of revenue from operations = Opening inventory + Purchases + Direct Expenses – Closing inventory
= 20,000 + 80,000 + 8,000 + 3,000 – 9,000
= ₹ 1,02,000
Revenue from operations = Cost of revenue from operations + Gross Profit
= 1,02,000 + 48,000
= ₹ 1,50,000
Operating Expenses = Depreciation + Amortization
= 18,000 + 6,000
= ₹ 24,000
Operating Ratio = `("Cost of revenue from operations + Operating Expenses")/"Revenue from operations" xx 100`
= `(1,02,000 + 24,000)/(1,50,000) xx 100`
= `(1,26,000)/(1,50,000) xx 100`
= 84%
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