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Question
Answer the following question:
What is meant by 'Gaining Ratio' on the retirement of a partner?
Solution
The ratio in which the outgoing partner's profit share is gained or acquired by the remaining partners is known as Gaining ratio. This ratio is calculated by taking the difference between the new ratio and the old ratio of the partners.
Algebraically,
Gaining Ratio = New Profit Sharing Ratio – Old Profit Sharing Ratio
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