Operating expense ratio is.....

The correct answer is Option (1) → Income statement ratio

In the traditional classification, a ratio is named after the statement its two figures come from. The operating expenses ratio is operating expenses ÷ revenue from operations × 100, and both figures come from the statement of profit and loss (the income statement). So it is an income statement ratio, which the book calls a statement of profit and loss ratio.

Option (2) Balance sheet ratio — Incorrect. A balance sheet ratio takes both figures from the balance sheet, such as the current ratio.

Option (3) Mixed ratio — Incorrect. A mixed (composite) ratio takes one figure from each statement, such as the trade receivables turnover ratio.

Option (4) Combined ratio — Incorrect. The traditional classification has no "combined" class; a ratio that takes figures from both statements is a composite ratio, and this ratio takes both its figures from one statement.