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Question
| Particulars | ₹ |
| Net Revenue from Operations | 25,00,000 |
| Credit Revenue from Operations | 15,00,000 |
| Gross Profit | 40% |
| Employee Benefit Exp. | 2,00,000 |
| Depreciation | 50,000 |
| Selling Expenses | 1,00,000 |
| Interest on Long term Debts | 3,00,000 |
Operating Ratio will be:
Options
68.75%
72%
86%
74%
MCQ
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Solution
74%
Explanation:
Operating Ratio = `"Cost of Revenue from Operations + Operating Expenses"/"Net Revenue from Operations"`
Cost of Revenue from Operations = Net Revenue from Operations − Gross Profit
= 25,00,000 − 40% of 25,00,000
= 25,00,000 − `40/100 xx 25,00,000`
= 25,00,000 − 10,00,000
= ₹ 15,00,000
Operating Expenses = Employee Benefit Exp. + Depreciation + Selling Expenses
= 2,00,000 + 50,000 + 1,00,000
= ₹ 3,50,000
Operating Ratio = `(15,00,000 + 3,50,000)/(25,00,000)`
= `(18,50,000)/(25,00,000)`
= 74%
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