Higher the ratio, the more favorable it is, doesn’t stand true for
Answers
Explanation:
Operating profit ratio is the ratio between operating profit and the net sales .Higher the ratio, higher would be the operating profit and it would be more favorable.
Stock turnover ratio is the relationship between the COGS and the average inventory. It indicates how fast the inventory is sold or used. A high ratio is favorable from the point of view of liquidity and vice versa.
ROI shows the returns made from the funds invested by the owners. A higher ratio is always preferred in case of returns.
Operating ratio is the ratio of operating expenses to the net sales. Higher this ratio higher would be the operating expense and lower the operating profit. So a lower ratio is more favorable in terms of business.
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Answer:
Operating ratio
Explanation:
Given: Higher the ratio, the more favorable it is, doesn’t stand true for ..........
Solution: The lower the operational ratio, the less beneficial it is because it leaves less room for interest, dividends, and other company necessities. This ratio is mostly used to determine management's operational efficiency in their business operations.
Operating ratio is a company's operating expenses as a percentage of revenue.
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