## Railway Accounts Department Examinations

Showing posts with label OR. Show all posts
Showing posts with label OR. Show all posts

## Tuesday, October 17, 2023

### O.R. - Operating Ratio - Practical -2012 year Question paper

Operating Ratio  (O.R) - Practical problem - 20 marks  - Compulsory
2012 year optional Books & Budget (without Books) Question paper
1. Given below are the financial results of Railways for the years 2007-08 and 2008-09.
Figures in Crores of Rs.
 Particulars 2007-08 2008-09 Gross Earnings 71645 79837 Traffic Suspense 75 25 Gross Traffic Receipts 71720 79862 Miscellaneous Receipts 1557 1797 Ordinary Working Expenses-OWE 41033 54349 Appropriation to DRF 5450 7000 Appropriation to Pension Fund 7979 10490 Miscellaneous Expenditure 480 645 Net Revenue 18334 9174 Dividend Paid 4903 4718

a) From the above figures, calculate the Operating Ratio for 2007-08 and 2008-09.
b) Comment on performance of the railway in 2008-09 compared to 2007-08, giving possible reasons for improvement /deterioration.  Calculate the amount available for sourcing of capital expenditure in each year and how is it normally allocated.
Ready reckoner for calculation of Operating Ratio
 SN Particulars formulae Amount SN Particulars formulae Amount Finding 1. Coaching Earnings (less refunds) 10 OWE - Ordinary Working Expenses 2. Goods Earnings (less refunds) 11 Appropriation to DRF 3 Traffic Earnings (1 + 2) 12 Appropriation to Pension Fund 4 Sundry Other Earnings (less refunds) 5 Gross Earnings (3 + 4) 13 Gross Working Expenses (10 + 11 + 12) O.R = 13/5 x 100 6 Suspense 14 Suspense 7 Gross Receipts (5 + 6) 15 Gross Expenditure (13 + 14) 8 Miscellaneous Receipts 16 Miscellaneous Expenditure 9 Total Revenue Receipts (7 + 8) 17 Total Revenue Expenditure (15 + 16) Net Revenue  = 9 - 17

Surplus = Net Revenue minus Dividends paid.  (Shortfall if the figure is negative)

2007-08 year

 SN Particulars formulae Amount SN Particulars formulae Amount 1. Coaching Earnings (less refunds) 10 OWE - Ordinary Working Expenses 41033 2. Goods Earnings (less refunds) 11 Appropriation to DRF 5450 3 Traffic Earnings (1 + 2) 12 Appropriation to Pension Fund 7979 4 Sundry Other Earnings (less refunds) 5 Gross Earnings (3 + 4) 71645 13 Gross Working Expenses (10 + 11 + 12) 54462 O.R = 13/5 x 100 = 76.02 % 6 Suspense 75 14 Suspense 0 7 Gross Receipts (5 + 6) 71720 15 Gross Expenditure (13 + 14) 54462 8 Miscellaneous Receipts 1557 16 Miscellaneous Expenditure 480 9 Total Revenue Receipts (7 + 8) 73277 17 Total Revenue Expenditure (15 + 16) 54942 Net Revenue  = 9 - 17 = 18335

Surplus = Net Revenue minus Dividends paid.  (Shortfall if the figure is negative)
surplus = 18335 - 4903 = 13432

2008-09 year
 SN Particulars formulae Amount SN Particulars formulae Amount 1. Coaching Earnings (less refunds) 10 OWE - Ordinary Working Expenses 54349 2. Goods Earnings (less refunds) 11 Appropriation to DRF 7000 3 Traffic Earnings (1 + 2) 12 Appropriation to Pension Fund 10490 4 Sundry Other Earnings (less refunds) 5 Gross Earnings (3 + 4) 79837 13 Gross Working Expenses (10 + 11 + 12) 71839 O.R = 13/5 x 100 =89.98 % 6 Suspense 25 14 Suspense 0 7 Gross Receipts (5 + 6) 79862 15 Gross Expenditure (13 + 14) 71839 8 Miscellaneous Receipts 1797 16 Miscellaneous Expenditure 645 9 Total Revenue Receipts (7 + 8) 81659 17 Total Revenue Expenditure (15 + 16) 72484 Net Revenue  = 9 - 17 = 9175

Surplus = Net Revenue minus Dividends paid.  (Shortfall if the figure is negative)
surplus = 9175 - 4718 = 4457

1 ) Operating Ratio for year 2007-08 is 76.02 % and for year 2008-09 is 89.98 %
2) i) Possible reasons for deterioration:  11% increase in Earnings is not sufficient to offset the increase of 30 % (average) in OWE, Appropriation to DRF & Pension Fund.  The reason for big jump on expenditure side is attributed to implementation of VI Pay commission w.e.f. 01.01.2006, but implemented in the financial year 2008-09 with retrospective effect.
ii) Amount available for sourcing of capital expenditure.  -  There is no clear cut rule for distribution of surplus among different funds.  After meeting the requirements of Development Fund, the left over will be allocated to Capital Fund for incurring of capital expenditure. ( to avoid Dividend liability)

 year Surplus Development Fund Capital Fund Remarks 2007-08 13432 1500 11932 Notional distribution 2008-09 4457 1391 3066 Actual distribution ( as per website of Railways)

## Monday, October 2, 2023

### Operating Ratio Numerical Problem - Appendix3 Exam - One time Special 2022 year

Ready reckoner for calculation of Operating Ratio

 SN Particulars formulae Amount SN Particulars formulae Amount 1. Coaching Earnings (less refunds) (60000+5000) 65000 1. OWE - Ordinary Working Expenses 150000 2. Goods Earnings (less refunds) 125000 2. Appropriation to DRF 5000 3 Sundry Other Earnings (less refunds) 10000 3 Appropriation to Pension Fund 40000 4 Gross Earnings (1+2+3) 200000 4 Gross Working Expenses (1+2+3) 195000 O.R = GWE/GE x 100 = 195000/200000 x 100 = 97.5 % 5 Suspense(Traffic & DR) (-) 300 5 Suspense (DP) (-) 400 6 Gross Receipts (4+5)) 199700 6 Gross Expenditure (4+5)) 194600 7 Miscellaneous Receipts 500 7 Miscellaneous Expenditure 2000 8 Total Revenue Receipts (6+7)) 200200 8 Total Revenue Expenditure (6+7) 196600 Net Revenue/Net Receipts/Surplus = TRR – TRE = 3600

1. Traffic Suspense -  (-) 300

2. Total Revenue Receipts - 200200

3. Gross Expenditure  - 194600

4. Operating Ratio  - 97.5 %

5. Surplus - 3600