what is gaining ratio
Answers
Gaining ratio is a financial tool that helps to measure the proportion in which a firm's remaining partners acquire the retiring partner or deceased partner's shares.
Gaining ratio is a financial tool that helps to measure the proportion in which a firm's remaining partners acquire the retiring partner or deceased partner's shares.It can also be described as the difference between the old profit sharing ratio and the new profit sharing ratio of partners.
Answer:
Gaining ratio is computed during the death or retirement of a partner. It is the ratio in which the existing partners obtain the profit portion of the departing partner’s. The ratio in which the continuing partners have obtained the portion from the deceased/retiring partner is known as the gaining ratio. Usually, the continuing partners obtain the share of the retiring/dead partner from their old profit sharing ratio. In that scenario, the gaining ratio of the remaining partners will be the same as their old profit sharing ratio among them and there is no need to calculate the gaining ratio.