ocr: Profit/Volume (Contribution Sales) Ratio The profit/volume ratio is very useful in that it enables the profitability of the business to be worked out very quickly once the level ofs sales revenue has been torecast. The profit/volume ratio is simply the contribution divided by the sales revenue, expressed as a percentage: P/Vratio = Contribution / Sales revenue * 100% The P/V ratio reveals the underlying relationship between sales revenue and variable costs for each product. AP/V: margin of 50% means that of every E100 of: sales revenue generated, there is. a contribution of E50 towards the fix ...
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