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How can anyone improve PV Ratio?

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posted Jun 16 by Sumeet Vyas

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1 Answer

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An improvement in this ratio can be achieved by:

The selling price increase; but the risk that the volume of sales might be affected in involved in it. By purchasing the latest machinery, a reduction in the variable cost per unit can be achieved, thereby cutting the hours which may be required to complete each operation. However, higher fixed costs such as depreciation & insurance might offset this reduction.

By concentrating on those products by which highest contribution can be achieved.

For doing business analysis, in the hands of management, the P/V ratio is an invaluable tool.

answer Jun 17 by Swati Tyagi
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