Determine the operating ratio if operating expenses is Rs. 60,000; sales is Rs. 9,40,000; sales return is Rs. 40,000; and cost of net goods sold is Rs. 6,60,000.

The correct answer is D. 11%.

The operating ratio is a measure of a company’s profitability. It is calculated by dividing the company’s operating expenses by its sales. In this case, the operating expenses are Rs. 60,000 and the sales are Rs. 9,40,000. Therefore, the operating ratio is 60,000/9,40,000 = 0.64 = 64%.

However, the sales return is Rs. 40,000. This means that the company actually sold Rs. 9,40,000 – Rs. 40,000 = Rs. 5,40,000 worth of goods. Therefore, the operating ratio should be calculated as 60,000/5,40,000 = 0.11 = 11%.

Option A is incorrect because it is the operating expenses as a percentage of sales. Option B is incorrect because it is the operating expenses as a percentage of cost of net goods sold. Option C is incorrect because it is the operating expenses as a percentage of sales return.