GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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100 - Operating ratio
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(Operating profit / Net Sales) x 100
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Both (a) and (b)
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((Cost of goods sold -Cost of operation)/Sales) x 100
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Detailed explanation-1: -Operating profit Ratio = Operating Profit / Net Sales × 100 Since, the operating profit ratio is expressed as a percentage, therefore we need to multiply by 100, the value obtained by the division of operating profit with the net sales.
Detailed explanation-2: -Operating profit ratio is a metric that is obtained by dividing the operating income of a business by its net sales. It is a ratio that depicts how much profit a business is making for each dollar worth of sales it is making. Operating profit ratio does not account for tax or interest in the numbers it deals with.
Detailed explanation-3: -The operating ratio is calculated by dividing a company’s total operating costs by its net sales.
Detailed explanation-4: -These are some common profitability ratios: Return on assets = net income ÷ average total assets. The return-on-assets ratio indicates how much profit companies make compared to their assets. Return on equity = net income ÷ average stockholder equity.