# P/v ratio

##### AVKASH View Profile My Other Post
IPCC Student

PLzz Anyone can help me out???

How P/V Ratio = Profit / Margin of Safety ???

##### CS RAJESH C.CHOUDHARY View Profile My Other Post
ASSISTANT MANAGER

Let Sale be 3,00,000 , Variable cost be 240,000 Contribution will be 60,000( sale - Vcost)

Now BES be 40% of Actual sale that comes to 1,20,000 and  cont come to 24,000 ( sale * P/v ratio)

MOS will be 60 % of Actual sale that comes to 180,000 and cont comes to 36,000( sale * p/v ratio)

and fixed cost in MOS is always 0 and rest of all is profit that is 36,000.

Profit =36,000

and Profit/MOS = 36000/180,000

=20% which is equal to P/v Ratio.

It's easy just make a table and follow the formula you will come to know okey .

All the Best

##### Mary Asha View Profile My Other Post
asharockz7@gmail.com

Margin of safety(value) = Profit/PV ratio.. PV ratio = profit/(profit/PV ratio) Profit gets cancel.. Hence left out is PV ratio...

##### srinivass View Profile My Other Post
CA Final

 Originally posted by : Mary Asha Margin of safety(value) = Profit/PV ratio.. PV ratio = profit/(profit/PV ratio) Profit gets cancel.. Hence left out is PV ratio...

##### CA PRAVEEN SINGH View Profile My Other Post
MANAGER ACCOUNTS

SALES                        ....................

LESS.  VARIABLE COST    .......................

CONTRIBUTION............................

LESS      FIXED COST.................................

PROFIT        ...............................

P/V RATIO=-CONTRIBUTION *100/SALES

MARGIN OF SAFETY=     ACTUL SALES - BEP SALES.

##### yogeshwar malhotra View Profile My Other Post
partner

1.MARGIN OF SAFETY = ACTUAL SALES - BREAK EVEN SALES

2. MARGIN OF SAFETY = ACTUAL SALES - FIXED COST / PV RATIO

3. M/S = ACTUAL SALES * PV RATIO - FIXED COST

----------------------------------------------------------    { BY RULE OF LCM}

PV RATIO

4. M/S * PV RATIO = ( ACTUAL SALES * PVR ) - FIXED COST

5. M/S *PV RATIO= CONTRIBUTION- FIXED COST

6. PV RATIO= PROFIT / MS

##### yogeshwar malhotra View Profile My Other Post
partner

C V P CHAPTER IS THE EASIEST ONE .

##### yogeshwar malhotra View Profile My Other Post
partner

VAISE TOH , THE FORMULA FOR M/S IS ALSO = PROFIT /PVR