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| 1. |
Surya Ltd. has earned contribution of Rs. 2,00,000 and net profit of Rs. 1,50,000 on sales of Rs. 8,00,000. Calculate the Margin of Safety and PV ratio. |
| Answer» TION:PV RATIO = Contribution/ Sales × 100= 2,00,000/8,00,000 ×100PV Ratio = 25% Margin of Safety = Profit / PV Ratio= 1,50,000 / 25%= 1,50,000 / (25/100)= 1,50,000 / 0.25= 6,00,000Margin of Safety = 6,00,000Therefore, PV Ratio = 25% and Margin of Safety = 6,00,000 | |