Question

Revenue from Operations ₹ 12,00,000; Cost of Revenue from Operations ₹ 5,00,000. Operating Cost ₹ 6,00,000. Calculate the Operating Ratio.

Answer 1

Calculation of Operating Ratio:

The formula for the Operating Ratio uses the total Operating Cost directly:

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

$$\text{Operating Ratio} = \left( \frac{6,00,000}{12,00,000} \right) \times 100 = 50\%$$

Operating Ratio = 50%