8/31/2023 0 Comments Profit volume ratioP/V ratio =contribution x100/sales (*Contribution means the difference between the sale price and variable cost). PV Ratio Formula or Profit Volume Ratio Formula The PV ratio or P/V ratio is arrived at by using the following pv ratio formula. It is one of the important ratios for computing profitability as it indicates contribution earned with respect to sales. ![]() It can be used to determine the profitability of each product or group of products separately so that one can examine the need for continued production. It can also be used for determining the profitability of each production centre, process, or operation. The profit-volume ratio has many advantages. Profit volume ratio Why is Profit Volume ratio important?
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