Question

If the Operating Ratio of Sana Ltd. is 28%, its Operating Profit Ratio will be ______.

Options

• 100%

• 72%

• 28%

• 128%

Answer 1

If the Operating Ratio of Sana Ltd. is 28%, its Operating Profit Ratio will be 72%.

Explanation:

Given:

Operating Ratio = 28%

We know that Operating Ratio and Operating Profit Ratio are complementary to each other, meaning their sum is always equal to 100%:

$$\text{Operating Ratio} + \text{Operating Profit Ratio} = 100\%$$ 

Therefore:
$$\begin{aligned} \text{Operating Profit Ratio} &= 100\% - \text{Operating Ratio} \\ &= 100\% - 28\% \\ &= {72\%} \end{aligned}$$