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Ratio Analysis
What is the difference between operating ratio and profit ratio?
Replies (3)
There are 3 types of profit ratios: operating, net profit and gross profit ratio. These profit ratios are calculated by dividing profit to net sales. More higher, more better.
Operating ratio is found by dividing operating expenses to sales. It is a measure of efficiency. The lesser it is, the better.
There are 3 types of profit ratios: operating, net profit and gross profit ratio. These profit ratios are calculated by dividing profit to net sales. More higher, more better.
Operating ratio is found by dividing operating expenses to sales. It is a measure of efficiency. The lesser it is, the better.
That was a clear reply , Thank you!
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