Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

Operating ratio is :

Options:

(Cost of revenue from operations + Selling Expenses/Net revenue from operations)*100

(Cost of production + Operating Expenses/Net revenue from operations)*100

(Cost of revenue from operations + Operating Expenses/Net Revenue from Operations)*100

Cost of Production/Net revenue from operations.

Correct Answer:

(Cost of revenue from operations + Operating Expenses/Net Revenue from Operations)*100

Explanation:

Operating Ratio is computed to analyse cost of operation in relation to revenue from operations. It is calculated as follows:
Operating Ratio = (Cost of Revenue from Operations + Operating Expenses)/ Net Revenue from Operations ×100