Which ratio measures the relation between Operating Profit and Revenue from Operations?

Operating Profit Ratio

Operating Profit Ratio = Operating Profit/ Revenue from Operations × 100
Where Operating Profit = Revenue from Operations – Operating Cost
** Operating ratio is computed to express cost of operations excluding financial charges in relation to revenue from operations. A corollary of it is ‘Operating Profit Ratio’. It helps to analyse the performance of business and throws light on the operational efficiency of the business. It is very useful for inter-firm as well as intra-firm comparisons. Lower operating ratio is a very healthy sign.