Partnership Ratio Calculator

Formula

The formula to calculate the Partnership Ratio (R) is:

\[ R = A : B \]

Where:

$ R $ is the Partnership Ratio (A:B)
$ A $ is the investment by Partner A ($)
$ B $ is the investment by Partner B ($)

Partnership Ratio Definition

A partnership ratio represents the proportion of ownership or profit-sharing between partners in a business based on their respective investments. It is an important aspect of partnership agreements and helps in determining how profits and losses are distributed among the partners.

Example Calculation

Let's consider an example:

Investment by Partner A: $300
Investment by Partner B: $500

Using the formula to calculate the Partnership Ratio:

\[ R = 300 : 500 = 3 : 5 \]

This demonstrates that with investments of $300 and $500, the partnership ratio would be 3:5.