151 :- Calculate Operating Ratio from the following information :
Operating Cost Rs 6,80,000; Gross Profit 25%; Operating Expenses Rs 80,000.
Solution :-
Operating Cost = Cost of Revenue from Operations + Operating Expenses
6,80,000 = Cost of Revenue from Operations + 80,000
Cost of Revenue from Operations = Rs 6,00,000
Revenue from Operations = 6,00,000 x 100/75
= Rs 8,00,000
Operating Ratio = (Operating Cost/Revenue from Operations) x 100
= (6,80,000/8,00,000) x 100
= 85%