1.

Operating Profit Ratio.

Answer»

This ratio discloses relationship between operating profit and sales. This ratio shows the proportion of operating profit to sales.
Operating Profit Ratio =  \(\frac{Operating \,Profit}{  Net \,Sales  }× 100\)
OR
Operating Profit Ratio = 100% – Operating Ratio.

  • Operating Profit = Sales – Operating cost
  • Operating Cost = Cost of goods sold + Operating expenses
  • This ratio indicates that how much is profit erarend by the unit from the business in which unit deals.
  • This ratio is income based ratio, so its increasing trend indicates the enhancement in profit.


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