Practice Operating Ratio - 1.4.4.3 | ICSE Class 12 Accounts – Chapter 5: Ratio Analysis | ICSE Class 12 Accounts
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1.4.4.3 - Operating Ratio

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Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

Calculate the Operating Ratio for a company with Net Sales of ₹200,000, COGS of ₹120,000, and Operating Expenses of ₹40,000.

💡 Hint: Use the formula: (COGS + Operating Expenses) / Net Sales.

Question 2

Easy

If the Operating Ratio for a company is 75%, what percentage of sales is spent on operational costs?

💡 Hint: The Operating Ratio directly indicates this percentage.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does a lower Operating Ratio indicate about a company?

  • Higher operational efficiency
  • Higher operational costs
  • Lower sales

💡 Hint: Connect the ratio with financial performance.

Question 2

True or False: The Operating Ratio can potentially influence investor decisions.

  • True
  • False

💡 Hint: Think about stakeholders' perspectives.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company reported Net Sales of ₹900,000, COGS of ₹600,000, and Operating Expenses of ₹250,000. Calculate the Operating Ratio and assess the implications for business strategies.

💡 Hint: Consider how to interpret the calculated ratio.

Question 2

Suppose Company B has an Operating Ratio of 70%. If the Total Net Sales increase to ₹1,200,000, how could they purposefully lower their Operating Ratio?

💡 Hint: Think about both cost management and revenue growth.

Challenge and get performance evaluation