Question : What is the formula of the Operating ratio choose the correct option: (A)Cost of revenue from operations + Selling Expenses/Net revenue from operations (B) Cost of production + Operating Expenses/Net revenue from operations (C) Cost of revenue from operations + Operating Expenses/Net Revenue from Operations
Option 1: Option A
Option 2: Option B
Option 3: Option C
Option 4: None of them
Correct Answer: Option C
Solution : Operating Ratio =(Cost of revenue from operations + Operating Expenses) / Net Revenue from Operations By comparing a company's total operating expense to net revenues, the operational ratio demonstrates the management effectiveness of that business. Hence option 3 is the correct answer.
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