The following line graph gives the annual percent profit earned by a Company during the period 1995 - 2000.
Percent Profit Earned by a Company Over the Years.
%Profit = (Income - Expenditure)/Expenditure x 100
During which of the following year was the ratio of income to the expenditure the minimum?
1996
1997
1998
1999
Correct answer is B
It is given that :
% Profit = (Income - Expenditure)/Expenditure x 100
=> % Profit/100 = (Income/Expenditure) - 1
=> Income/Expenditure = (% Profit/ 100) + 1
From this it is clear that the ratio of income to expenditure is minimum for the year in which the % Profit has the minimum value. Since, out of given years (i.e., out of 1996, 1997, 1998, 1999 and 2000), the Company has the minimum % profit in the year 1997.
So the minimum ratio of income to expenditure is in the year 1997.
