Question : ______________ratio measures the proportion of an enterprise's cost of Revenue from Operations and operating expenses in comparison to its Revenue from Operations.
Option 1: Gross profit ratio
Option 2: Net profit ratio
Option 3: Operating profit ratio
Option 4: Operating ratio
Correct Answer: Operating ratio
Solution :
Answer =
Operating ratio
.
The operating ratio establishes the Relationship Between operating cost and revenue from operation. The operating ratio assesses the efficiency of a company's operations by comparing its cost of revenue from operations and operating expenses to its revenue from operations. It reveals the percentage of revenue utilized for operational costs.
Hence, the correct option is 4.
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