what is the meaning of P/V Ratio?

Categories >> Accounting >> Accounting AllOther
Suggest New Category

Question Posted / rama

25 Answers
165512 Views
Chartered Accountant, Deloitte, eForum, GIC, Infosys, TCS, Wipro, I also Faced
E-Mail Answers

Answers were Sorted based on User's Feedback

what is the meaning of P/V Ratio? ..

Answer / kafeeel

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 ?

524 Yes

43 No

what is the meaning of P/V Ratio? ..

Answer / kiran pandit

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 ?

263 Yes

44 No

what is the meaning of P/V Ratio? ..

Answer / laxman

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 ?

146 Yes

30 No

what is the meaning of P/V Ratio? ..

Answer / krish

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 ?

112 Yes

15 No

what is the meaning of P/V Ratio? ..

Answer / hari enaganti.

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 ?

75 Yes

14 No

what is the meaning of P/V Ratio? ..

Answer / jacobjijimon

Is This Answer Correct ?

64 Yes

16 No

what is the meaning of P/V Ratio? ..

Answer / abhinav

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 ?

52 Yes

12 No

what is the meaning of P/V Ratio? ..

Answer / ankur

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 ?

48 Yes

14 No

what is the meaning of P/V Ratio? ..

Answer / k. v. shukla

NEEDS:-To know the profitability of any business.
P/v ratio: Shows the relationship between contribution and
sales.
Usually expressed in percentage.
contribution =selling price-variable cost
=fixed cost+ profit or - loss
contribution
p/v ratio = -------------- * 100
sales

Is This Answer Correct ?

28 Yes

6 No

what is the meaning of P/V Ratio? ..

Answer / kiran kumar

The sales and marginal costs vary directly with the number
of units solds or produced.
p/v ratio=contribution/sales*100

Is This Answer Correct ?

17 Yes

3 No