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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Calculate Operating Ratio from the following information: Operating Cost ₹6,80,000; Gross Profit Ratio 25%; Operating Expenses ₹80,000.
Cost of Revenue from Operations = Operating Cost − Operating Expenses = 6,80,000 − 80,000 = ₹6,00,000
Since Gross Profit Ratio is 25% of Sales, Gross Profit is 1/3rd of Cost (Cost:Profit:Sales = 3:1:4).
Gross Profit = 1/3 × 6,00,000 = ₹2,00,000
Gross Profit Ratio = Gross Profit ÷ Net Sales × 100
25 = 2,00,000 ÷ Net Sales × 100
Net Sales = ₹8,00,000
Operating Ratio = Operating Cost ÷ Net Sales × 100 = 6,80,000 ÷ 8,00,000 × 100 = 85%
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.151 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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