It is the relationship between sales and contribution. This ratio helps to ascertain the profitability of the firm. The formula of

P/V ratio= Contribution/sales.

P/V ratio= Sales-Variable Cost/Sales

P/V ratio= Fixed Cost+ Profit/ Sales.

P/V ratio= Contribution/sales.

P/V ratio= Sales-Variable Cost/Sales

P/V ratio= Fixed Cost+ Profit/ Sales.