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Operating ratio = (Cost of goods sold + operating expenses) / sales *100 Cost of goods sold (COGS) = opening stock + purchases + carriage and freight + wages – closing stock = 76,250 + 315,250 + 2000 + 5000 – 98,500 = 3,00,000 Operating expenses = admin expenses + selling and dist. Expenses = 1,01,000 + 12,000 = 1,13,000 Operating ratio = (3,00,000 + 1,13,000) / 5,00,000 *100 = 82.6%
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