Which combination is true in respect of using a graph/chart? (A) Quicker and easier to create a chart immediately to see the possible relationship of…

Operating Ratio measures the relationship between operating costs and revenue from operations. It is expressed as a percentage.

The formula is:

Operating Ratio = $\frac{\text{Operating Cost}}{\text{Revenue from Operations}} \times 100$Revenue from OperationsOperating Cost​×100

where Operating Cost = Cost of Revenue from Operations + Operating Expenses

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Calculation of Operating Cost:

Operating Cost = Cost of Revenue from Operations + Selling Expenses + Administrative Expenses

Operating Cost = 1,20,000 + 80,000 + 40,000 = 2,40,000

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Calculation of Operating Ratio:

Operating Ratio = $\frac{2,40,000}{3,40,000} \times 100$3,40,0002,40,000​×100

Operating Ratio = 0.7059 × 100 = 70.59%

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The result is a percentage (not "times") because Operating Ratio expresses operating costs as a proportion of sales revenue. A ratio of 70.59% means that for every Rs. 100 of revenue, Rs. 70.59 is spent on operating costs.

Correct Option: 4 (70.59%)