P/V or C/S ratio

skips
skips Registered Posts: 12 Regular contributor ⭐ ? ⭐
hello
can anyone explain to me what this is and when would you use it?! and how do you calculated expected profit?!

thanks
Skips

Comments

  • CathG
    CathG Registered Posts: 145 ? ? ?
    PV Ratio

    Profit Volume ratio is calculated thus:

    contribution/selling price

    eg: £10 contribution
    £30 selling price = 0.33 x 100 = 33%

    so in this instance the contribution makes up 33% of the selling price.

    PV ratio can be used to find sales revenue break even figure:

    fixed costs £5000
    PV Ratio 0.33 = 15,152
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