Sacrificing Ratio is the ratio in which the old or existing partners forego their share of profit in favour of the new or incoming partner. It can be defined to be the ratio in which the new partner is given the share by the old partner is given the share by the old partners is the Sacrificing Ratio.
Sacrificing Ratio = Old Ratio - New Ratio
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Sacrifice Ratio is to be calculated in Admission of Partner & it is to be calculated as under :
Sacrifice ratio = Old Ratio (-) New Ratio
In some problems the sacrifice ratio is itself given.
for e.g. A & B are partners sharing profits and losses 3:2 they admitted C into partnership on 1/4 share which he acquires 3/4 from A and 1/4 from B. Thus sacrifice Ratio of A & B Partners are 3/4 & 1/4 i.e. 3:1.
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Sacrificing Ratio is the ratio in which the old or existing partners forego their share of profit in favour of the new or incoming partner. It can be defined to be the ratio in which the new partner is given the share by the old partner is given the share by the old partners is the Sacrificing Ratio.
Sacrificing Ratio = Old Ratio - New Ratio
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A and B 's Sacrifice in this case is calculated as under:
A= 1/6 x 2/3= 2/18 (1/9) (ie2/3 part of 1/6th share given to C) B= 1/6 x 1/3= 1/18 ( is 1/3 part of 1/6thShare given to C)
So their New Ratio is A= 3/5- 1/9 = 27-5/45= 22/45 , B = 2/5 - 1/8 = 36-5/90 = 31/90. New Ratio of A B C is 44:31:15 (C = 1/6 = 15/90)
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SR = OR - NR
EXAMPLE :
A nad B are partners in the ratio of 2:1. They decided to admit C. The new ratio of them is 3:2:1. Calculate Sacrificing ratio.
Sacrificing Ratio of A = 2/3 - 3/6 =1/6
Sacrificing Ratio of B = 1/3 - 2/6 =0
means only A sacrifice .
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A and B 's Sacrifice in this case is calculated as under:
A= 1/6 x 2/3= 2/18 (1/9) (ie2/3 part of 1/6th share given to C) B= 1/6 x 1/3= 1/18 ( is 1/3 part of 1/6thShare given to C)
So their New Ratio is A= 3/5- 1/9 = 27-5/45= 22/45 , B = 2/5 - 1/8 = 36-5/90 = 31/90. New Ratio of A B C is 44:31:15 (C = 1/6 = 15/90)
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Step 2- Then, find new profit sharing ratio of all the partners, including new one.
NEW PROFIT SHARING RATIO
Let the whole ratio be 1
Remaining ratio of old partners=1-(share of new partner)
After that find new profit sharing ratio of all the partners by applying
FOR OLD PARTNERS- Their current share ? Remaining share of old partners.
FOR NEW PARTNER- His share?(number to be multiplied in both numerator and denominator to make denominator equal for all partners.)
Step 3- After calculating new profit sharing ratio, u can find sacrificing ratio by applying formula
OLD RATIO- NEW RATIO
Hope you will find this useful....
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