Profit / Volume Ratio (P/V ratio) can be calculated as:
Change in Profit of two periods/ Change in Sales of two periods x 100
Correct AnswerChange in Cost of two periods/ Change in Sales of two periods x 100
Incorrect AnswerChange in Profit of two periods/ Change in Cost of two periods x 100
Incorrect Answer None of the above
Incorrect AnswerExplanation:
P/V ratio establishes the relationship between contribution and sales. It shows the amount of contribution per rupee of sales. It is also called contribution to sales ratio. It is measurement of the rate of change of profit due to change in volume of sales. Profit / Volume Ratio (P/V ratio) can be also be calculated as:
Change in Profit of two periods/ Change in Sales of two periods x 100
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By: Vikas Goyal