Performance of a blue-chip company over 6 years has been represented

Question

Performance of a blue-chip company over 6 years has been represented in the chart below. Each circle indicates ratio of Revenue to Profit (value mentioned in the circle). The horizontal axis shows profits.

1. The highest profit comparative to revenue was in the year .

2. Profit to expense ratio is least in the year .

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Dropdown 1: 6 Dropdown 2: 4

Malar95 · Answer

Each circle indicates ratio of Revenue to Profit (value mentioned in the circle).  
1. Y6 -Im reversing it the above line and picking the lowest value since the Q asks for profit to revenue
2. Y4 - Higher revenue to profit, lower profit to expense thus highest value here

zlishz · Answer

1. The highest profit comparative to revenue was in the year #6 
Revenue to profit ratio means R:P that is, R/P. The first questions asks which year shows highest profit (P). That is, where P in R/P is highest, if in R/P, the denominator, which is P in this case is the highest, then the ratio will be the lowest. Thus, the lowest ratio is in year 6.

2. Profit to expense ratio is least in the year #4 
Revenue - Expense = Profits, thus, E=R-P. The ratio we're looking for here is Profit to Expense which is P/(R-P). For this ratio to be the least numerator should be small and the denominator (R-P) should be big. For year 4, we see R/P is 3.15/1. Then R-P will be 3.15-1 = 2.15. Other years have R-P lesser than 2.15, thus, year 4 is the answer.

HarshZsssh · Answer

can anybody simplify this questions

Nikkz99 · Answer

Circles represent -> Revenue to Profit Ratio

Revenue generally -> Price * Quantity
(So basically, Profit is part of Price)

For example,

Let's say => Price of a quantity is $10 such that ($8 -> Making cost + transport fee + other expense ; $2 -> Profit)

So, Revenue to Profit ratio in this case is 10/2 => 5
Basically, higher the ratio lower the fraction of profit in the given revenue.

If we consider Profit : Expense ratio -> 2/8 => 1/4 or 0.25

For Q1, Need to pick the highest profit : revenue -> i.e lowest value in the given chart. i.e Year 6
For Q2, Need to pick profit : expense ratio -> the highest ratio of Revenue to Profit i.e Year 4

Hope it helps : )

Performance of a blue-chip company over 6 years has been represented

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