profit-volume ratio

profit-volume ratio

a ratio used in MARGINAL COSTING and BREAKEVEN analysis which shows the CONTRIBUTION as a percentage of sales. For example, if the profit-volume ratio is 42%, then for every £100 of sales a contribution towards fixed costs and profit of £42 will be generated, provided that selling prices and unit variable costs do not change.
References in periodicals archive ?
The contribution margin ratio is also referred to as the profit-volume ratio.