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Define Profit/Volume Ratio (P/V-Ratio or C/S Ratio).

Posted on May 23, 2023May 23, 2023 by dolykundu00@gmail.com

Profit/Volume Ratio (P/V-Ratio or C/S Ratio):

The Profit/Volume ratio, which is also called the “Contribution ratio” or marginal ratio, expresses the relation of contribution to sales and be expressed in the following manner –

$$\frac PV\;ratio\;=\;\frac{Contribution}{Sales}\;or\;\frac CS$$

$$or,\;\frac PV\;ratio\;=\;\frac{S-V}S$$

$$or,\;\frac PV\;Ratio\;=\;\frac{\;(F\pm P)}S$$

$$or,\;\frac PV\;Ratio\;=\;\frac{(Change\;in\;Profit\;or\;Contribution)}{(Change\;in\;Sales)}$$

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