Based on following data related to Ambe limited, Jaipur, Answer question.
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Identity the ratio that is computed to analyse cost of operation in relation to revenue from operations. |
Operating Ratio Operating Profit Ratio Gross Profit Ratio Return on Investment |
Operating Ratio |
The correct answer is Option 1 - Operating Ratio. 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. Operating expenses include office expenses, administrative expenses, selling expenses, distribution expenses, depreciation and employee benefit expenses etc. |