Practicing Success
What is the difference between operating ratio and operating profit ratio? |
Operating Profit Ratio = 100 + Operating Ratio Operating Profit Ratio = 100 – Operating Ratio Operating Profit Ratio = 100 – 10% of Operating Ratio None of these |
Operating Profit Ratio = 100 – Operating Ratio |
The correct answer is option 2 i.e. Operating Profit Ratio = 100 – Operating Ratio. Operating Profit Ratio : It is calculated to reveal operating margin. It may be computed directly or as a residual of operating ratio. |