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      Question

      Which of the following ratio is given by the formula

      EBIT by Sales?
      A Gross Profit Ratio Correct Answer Incorrect Answer
      B Operating profit ratio Correct Answer Incorrect Answer
      C Operating Ratio Correct Answer Incorrect Answer
      D Net Profit Ratio Correct Answer Incorrect Answer
      E Return on Capital Correct Answer Incorrect Answer

      Solution

      Operating profit ratio is one of the profitability ratios calculated as operating profit/revenue o sales. The operating profit is represented by EBIT (earnings before interest and tax). Operating Profit = EBIT/Sales Operating profit ratio helps to analyse the performance of business and throws light on the operational efficiency of the business.

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