Practice - Operating Ratio
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Practice Questions
Test your understanding with targeted questions
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.
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.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does a lower Operating Ratio indicate about a company?
💡 Hint: Connect the ratio with financial performance.
True or False: The Operating Ratio can potentially influence investor decisions.
💡 Hint: Think about stakeholders' perspectives.
2 more questions available
Challenge Problems
Push your limits with advanced challenges
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.
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.
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