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Question
| Particulars | ₹ |
| Net Revenue from Operations | 20,00,000 |
| Credit Revenue from Operations | 10,00,000 |
| Gross Profit | 6,00,000 |
| Office Expenses | 2,00,000 |
| Selling Expenses | 1,00,000 |
| Loss by Fire | 2,00,000 |
Operating Ratio will be:
Options
70%
85%
90%
95%
MCQ
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Solution
85%
Explanation:
Cost of Revenue from Operations = Net Revenue from Operations − Gross Profit
= 20,00,000 − 6,00,000
= ₹ 14,00,000
Operating Expenses = Office Expenses + Selling Expenses
= 2,00,000 + 1,00,000
= ₹ 3,00,000
Operating Ratio = `("Cost of Revenue from Operations" + "Operating Expenses")/"Net Revenue from Operations" xx 100`
Operating Ratio = `(14,00,000 + 3,00,000)/(20,00,000) xx 100`
= `(17,00,000)/(20,00,000) xx 100`
= 85%
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