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Question
Cost of Revenue from Operations (Cost of Goods Sold) ₹3,00,000. Operating Expenses ₹1,20,000. Revenue from Operations: Cash Sales ₹5,20,000; Return ₹20,000. Calculate Operating Ratio.
Solution
Net Sales = Sales - Sales Return
= 520000 - 20000 = 500000
Opening Cost = Cost of Goods Sold + Operating Expenses
= 300000 + 120000 = 420000
Operating Ratio = `"Operating Cost"/"Net sales" xx 100`
`= 420000/500000 xx 100 = 84 %`
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