Question : Calculate the operating ratio from the following information:
Total Revenue from Operations =Rs.25,00,000
Cost of Revenue from Operations =Rs.9,00,000
Operating Expenses =Rs.3,50,000
Option 1: 5:1
Option 2: 1:3
Option 3: 1:2
Option 4: 1:5
Correct Answer: 1:2
Solution :
Operating Ratio = (Cost of Revenue from Operations + Operating Expenses)/ Net Revenue from Operations
Operating Ratio = (9,00,000+ 3,50,000)/2500000=1:2
Hence option 3 is correct.




