Question

Cost of Revenue from Operations ₹ 3,00,000. Operating Expenses ₹ 1,20,000. Revenue from Operations: ₹ 5,00,000. Calculate the Operating Ratio.

Answer 1

Calculation of Operating Cost:

\[\text{Operating Cost} = \text{Cost of Revenue from Operations} + \text{Operating Expenses}\]

$$\text{Operating Cost} = ₹ 3,00,000 + ₹ 1,20,000$$

$${\text{Operating Cost} = ₹ 4,20,000}$$

Calculation of Operating Ratio:

$$\text{Operating Ratio} = \left( \frac{\text{Operating Cost}}{\text{Revenue from Operations}} \right) \times 100$$

$$\text{Operating Ratio} = \left( \frac{4,20,000}{5,00,000} \right) \times 100 = 84\%$$

Operating Ratio = 84%