Formula for P/v Ratio?

The PV ratio or P/V ratio is arrived by using following formula. P/V ratio =contribution x100/sales (*Contribution means the difference between sale price and variable cost). Here contribution is multiplied by 100 to arrive the percentage.

What is contribution formula?

Formulae: Contribution = total sales less total variable costs. Contribution per unit = selling price per unit less variable costs per unit. Total contribution can also be calculated as: Contribution per unit x number of units sold.

Is PV ratio same as contribution margin ratio?

The total contribution margin divided by the total sales is equal to Contribution margin ratio. It is also known as the profit-volume ratio (p/v ratio).