Who should compensate whom in case of change in profit sharing ratio of existing partners?

Gaining partner to sacrificing partner

The correct answer is option 2- Gaining partner to sacrificing partner.

When there is a change in the profit sharing ratio among existing partners in a partnership, it often results in one or more partners gaining a larger share of profits (gaining partner) while another partner's share decreases (sacrificing partner). Gaining Partner is benefiting from an increase in their share of profits. The gaining partner should compensate the sacrificing partner for the portion of profits that the sacrificing partner is giving up. Thus, on the change in profit sharing ratio among existing partners, gaining partners will compensate the sacrificing partners.