Question

Calculate Operating Ratio:

Trading and Profit and Loss A/c of Kalpana for the year ending 31st March 2019.

Trading and Profit and Loss A/c

Answer 1

Cost of goods sold = Net sales – Gross profit

= 7,70,000 – 3,90,000

= ₹ 3,80,000

Operating expenses = Adm. exp. + Selling and Distribution expenses

= 50,000 + 60,000

= ₹ 1,10,000

Operating ratio = \(\frac{Cost\,of\,goods\,sold\,+\,Operating\,expense}{Net\,sales}\times100\)

= \(\frac{3,80,000\,+\,1,10,000}{7,70,000}\times100\)

= \(\frac{4,90,000}{7,70,000}\times100\)

= 63.64%