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Question
```what is the meaning of P/V Ratio?
```
Question Submitted By :: Rama
I also faced this Question!!     Rank Answer Posted By

Re: what is the meaning of P/V Ratio?
# 1
The sales and marginal costs vary directly with the number
of units sold or produced. So, the difference between sales
and marginal cost, i.e. contribution, will bear a relation
to sales and the ratio of contribution to sales remains
constant at all levels. This is profit volume or P/V ratio.
Thus,

p/v ratio = contribution /sales x100

 Is This Answer Correct ? 411 Yes 35 No
Kafeeel

Re: what is the meaning of P/V Ratio?
# 2
P/V Ratio is the relationship between the profit & sales.In
formula it is expressed as P/V Ratio=
Contribution/sales*100.The higher the P/V Ratio better is
for company prospects.

 Is This Answer Correct ? 196 Yes 36 No
Kiran Pandit

Re: what is the meaning of P/V Ratio?
# 3
P/V ratio express the relationship between sales and
contribution.In formulait is expressed as P/V Ratio=
contribution/sales*100, sales-variable cost/sales*100

 Is This Answer Correct ? 116 Yes 22 No
Laxman

Re: what is the meaning of P/V Ratio?
# 4
P/VRatio showes the relationship beetween sales and
contribution .........
P/V Ratio :sales/contribution *100
:sales/fixedcost+profit *100
:sales/sales-variable cost *100

 Is This Answer Correct ? 52 Yes 125 No
Satya

Re: what is the meaning of P/V Ratio?
# 5
This ratio shows the information for analysing the profit
impact because of changes in sales volume, change in cost &
price of firm.

 Is This Answer Correct ? 42 Yes 32 No
Geeta Jain

Re: what is the meaning of P/V Ratio?
# 6
The sales and marginal costs vary directly with the number
of units sold or produced. So, the difference between sales
and marginal cost, i.e. contribution, will bear a relation
to sales and the ratio of contribution to sales remains
constant at all levels. This is profit volume or P/V ratio.
Thus, p/v ratio = contribution /sales x100

 Is This Answer Correct ? 46 Yes 13 No
Jacobjijimon

Re: what is the meaning of P/V Ratio?
# 7
In business it is very tough to tell about the net profit
ratio of a particular activity undertaken by it because it
is easy to tell about the variable cost of that activity
but it is tough to tell about the fixed cost to be charged
on that activity therefore we subtract the variable cost
from the selling price and the amount so received is termed
as contribution which tells us about the amount contributed
from sales after variable cost to coverup the fixed cost.
And it is computed as :-
contribution/sales*100
which tells the per unit contribution towards fixed cost.

 Is This Answer Correct ? 40 Yes 7 No
Ankur

Re: what is the meaning of P/V Ratio?
# 8
P/V ratio or profit volume ratio is the ratio of change in
profit to change in sales it can be computed in any of the
following four methods:-

1)[Contribution/Sales]*100
2)[(Fixed Cost + Profit)/Sales]*100
3)[(Sales - Variable Cost)/Sales]*100
4)Change in Profit/ Change in Sales

 Is This Answer Correct ? 77 Yes 8 No
Krish

Re: what is the meaning of P/V Ratio?
# 9
P/V ratio express the relationship between sales and
contribution.
contribution is sales - variable cost.

contribution
P/V Ratio= ------------ * 100
Sales

 Is This Answer Correct ? 58 Yes 6 No
Hari Enaganti.

Re: what is the meaning of P/V Ratio?
# 10
profit volume ratio is a ratio which is calculated in order
to determine the relationship between sales volume and
profit of a company.The general formula of calculating p/v
ratio is as follows:

p/v ratio = contribution/sales * 100

 Is This Answer Correct ? 40 Yes 7 No
Abhinav

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