Question : What is the formula for the Operating ratio?
Option 1: Cost of Production/Net revenue from operations.
Option 2: Cost of production + Operating Expenses/Net revenue from operations
Option 3: Cost of revenue from operations + Operating Expenses/Net Revenue from Operations
Option 4: None of the above
Answer (1)
19th Jan, 2024
Correct Answer: Cost of revenue from operations + Operating Expenses/Net Revenue from Operations
Solution :
The operating ratio demonstrates how effectively a company's management controls expenditures while producing income or sales.
Formula: Cost of revenue from Operations + Operating Expenses/Net Operations Revenue
Therefore, the right answer is option 3.
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