REPUBLIC OF THE PHILIPPINES
PROVINCE OF ZAMBOANGA DEL NORTE
SAINT JOSEPH COLLEGE OF SINDANGAN INCORPORATED
Senior High School Department
BUSINESS MATHEMATICS
MODULE 2: RATIO AND PROPORTION
Learning Target/s: At the end of the lesson, the learners CAN:
1. Compare and differentiate ratio and rate
2. Write proportions illustrating real – life situations
3. Solve problems involving direct, inverse and partitive proportions.
Values: Work – Life Balance
3 weeks
Time Duration: 12 hours
Reference/s: Solano, D. I. (2016). Business Mathematics. Makati City, Philippines: Diwa Learning
Systems, Inc., pp. 39 – 62
Getting Started:
What is the ratio of your savings to your allowance?
Savings should not be thought of as an amount that is left from spending your allowance.
Have a fixed target savings that your will deduct right away from your allowance before thinking
of spending your allowance. Adopt the formula: Allowance – Savings = Expense and not
Allowance – Expense = Savings.
RATIO
A ratio is a comparison of two numbers or quantities. The ratio of a number a to a number
b provided that b is not equal to zero can be written as
Let us say your class is composed of 15 boys and 45 girls. The ratio of boys to girls can be
15
written as 15 to 45, 15 : 45, or . The ratio 15 : 45 is read as “15 is to 45.” Since ratios can also
45
15
be expressed in fractions, then they can be simplified or reduced to lowest terms. The ratio
45
1
can be simplified or reduced to lowest terms as or 1 : 3 or 1 to 3. This means that for every
3
1 1
boy in your class, there are 3 girls; or of the students in your class are boys. The ratio can
3 3
also be expressed as a decimal, which is equivalent to 0.333. On the other hand, the ratio of
45 3
girls to boys in your class can be written as and reduced to or 3 : 1 or 3 to 1. This ratio
15 1
means there are three times as many girls as boys in your class.
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𝒂
or a : b or a to b.
𝒃
Let us now find out how ratios are applied in business transactions in the examples that
follow.
Example 1:
Liz and Beth are cousins and they have decided to become business partners. They have
agreed that Liz will invest P250,000, while Beth will invest P400,000. The profit from this business
venture will be divided based on the ratio of their investments. What is the ratio of their
investments which will be used later as basis in the distribution of profit?
Solution:
Write the ratio of Liz’ investment to Beth’s investment as a fraction first.
𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑜𝑓 𝐿𝑖𝑧 250,000
=
𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑜𝑓 𝐵𝑒𝑡ℎ 400,000
250,000
Hence, the ratio of Liz’ investment to Beth’s investment is 400,000.
Next, express the ration in simplest form by dividing the numerator and the denominator
by their GCF.
250,000 25 ÷ 5 𝟓
= =
400,000 40 ÷ 5 𝟖
5
Therefore, the ratio of Liz’ investment to Beth’s investment in simplest for is or 5 : 8 or 5
8
to 8. This means that for every P5 of Liz’ investment, Beth’s investment is P8. In decimal, the ratio
is equivalent to 0.625. Liz’ investment is 0.625 or 62.5% of Beth’s investment.
Example 2:
A company’s accounting manager is reviewing the budget for next year and calculating
some ratios. He wanted to know the firm’s ability to pay its short-term debt (loan or financial
obligation that is due within one year) by determining its current ratio or working capital ratio
(also known as the banker’s ratio).
Current ratio is one of the ratios computed in the financial statement analysis. It is
calculated by dividing the current assets (cash and other assets that can readily converted into
cash within one year). Hence, current ratio reflects the ability of a firm to pay for its current
liabilities with its current assets.
What is the firm’s current ratio if it has current assets of P1,550,000 and current liabilities
of P1,240,000? Will the company have the ability to pay its short-term debt?
Solution:
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜 = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
1,550,000
= 1,240,000
5
=4
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= 1.25
Yes, the company will still have the ability to pay its short-term debt based on its current
ratio of 1.25 which is greater than 1.0. A current ratio whose value is greater than 1.0 indicates
RATE
that the current assets are greater than the current liabilities. If the current liabilities are greater
than the current assets, the value of the current ratio will be less than 1.0.
Rate is a concept that is used often in everyday situations such as when you compare
prices of goods with different quantities. You compare items to determine which one is the better
buy.
Rate is a special ratio of two numbers with different units of measurement such as
kilometers per hour, words per minute, or price per kilogram. To drive 600 km in 12 hours is to
drive at the rate (or speed) of 50 km/hr (kph). To type 180 words in 3 minutes is to type at the
An example that illustrates this situation is when you buy party needs like paper plates,
disposable cups, spoons and forks. You see different prices for different number of items; for
example, P37.00 for 20 paper plates, P79.00 for 50 paper plates, or P73.00 for 40 paper plates.
It is not easy to compare these three buying options because they differ in quantities and in
prices. Smart shoppers would be interested in the unit rate or unit price of the product, its
quality, and other factors to make better buying decisions. Health workers regularly check on
the heart rate or pulse rate to monitor the improvement in the health condition of their
patients. A job applicant would like to know his rate --- how much he will be receiving per
hour or per day or per month --- before accepting a job offer.
rate of 60 words per minute. These examples express how long it takes to do something. By
converting the ratio to a fraction with a denominator of 1 unit gives the unit rate of doing
something. Similarly, products from different manufacturers are packed in different grams or
units per pack. This practice makes it difficult for consumers to compare prices of the same
product from different manufacturers unless they take time computing the unit price.
Example 3:
Your company delivery truck driver drove a distance of 600 km in 10 hours. You wanted
to determine if he could be charged of overspeeding if he drives along EDSA or Commonwealth
Avenue at this speed. What is his driving speed in kilometers per hour?
Solution:
To determine his average driving speed in kilometers per hour, divide the number of
kilometers he drove by the number of hours.
600 𝑘𝑚
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐷𝑟𝑖𝑣𝑖𝑛𝑔 𝑆𝑝𝑒𝑒𝑑 = = 𝟔𝟎 𝐤𝐦/𝐡𝐫
10 ℎ𝑟𝑠
The delivery truck driver could not be charged with overspeeding when he drives along
EDSA or Commonwealth Avenue as long as he maintains his speed at this rate and not go
beyond 60 km/hr.
Example 4:
You are required to compute the country’s population density. Based on your research,
you determined that the population of the Philippines is estimated at 101,802,706 as of July 2014
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and the estimated land area of the Philippines is 300,000 km2 (Source: http;//[Link];
last accessed on 24 June 2015). What is the population density of the Philippines?
Solution:
To compute the population density, divide the total population by the total land area.
𝑇𝑜𝑡𝑎𝑙 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 101,802,706
𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝐷𝑒𝑛𝑠𝑖𝑡𝑦 = =
𝑇𝑜𝑡𝑎𝑙 𝐿𝑎𝑛𝑑 𝐴𝑟𝑒𝑎 300,000
= 339.342
PROPORTION
Proportion refers to the statement of the equality of two ratios. If a : b and c : d are two
equal ratios, then the proportion can be written as a : b = c : d (read as “a is to b as c is to d”) or
𝑎 𝑐
= . The terms a and d are called extremes, while the terms b and c, are the means.
𝑏 𝑑
In a proportion, the product of the means is equal to the product of the extremes, that is,
𝑎 𝑐
= is a proportion if and only if ad = bc.
𝑏 𝑑
Is 6 : 8 = 12 : 16 a proportion? To determine whether the two ratios form a proportion,
simplify or reduce both ratios to their lowest terms.
6 6÷2 3
= =
8 8÷2 4
12 12 ÷ 4 3
= =
16 16 ÷ 4 4
Since the two ratios have the same simplest form, then they form a proportion.
An alternative method to determine if the two ratios form a proportion is to find out if the
product of the means (𝑏 ∙ 𝑐) and the product of the extremes (𝑎 ∙ 𝑑) are equal; that is,
𝑎 𝑐
= → 𝑎 ∶ 𝑏 = 𝑐 ∶ 𝑑 → 𝑎𝑑 = 𝑏𝑐
𝑏 𝑑
Using the given rule of proportion, you can determine if the ratios 6 : 8 = 12 : 16 form a
proportion by multiplying 6 by 16 and 8 by 12.
6 ∶ 8 = 12 ∶ 16
6 × 16 = 8 × 12
𝟗𝟔 = 𝟗𝟔
Since the product of the extremes and the product of the means are equal, then the two
ratios form a proportion. The two ratios are also equivalent fractions.
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FINDING THE MISSING TERM IN A PROPORTION
To find the missing term in a given proportion, apply the rule of proportion, that is, the
product of the extremes of a proportion should be equal to the product of the means. Then solve
for the missing term algebraically.
Example 5:
Find the value of the missing term in each proportion.
a. a : 4 = 15 : 20
b. 4 : b = 24 : 18
Solution:
a. a : 4 = 15 : 20
𝑎 × 20 = 4 × 15
20a = 60
20𝑎 60
=
20 20
a=3
b. 4 : b = 24 : 18
4 × 18 = 𝑏 × 24
72 = 24b
24b = 72
24𝑏 72
=
24 24
b=3
Example 6:
Having conducted ratio analysis of your trading company’s previous financial statements,
you are aware that the ratio of the company’s cost of sales to the company’s total net sales is 3 :
5. What is the total net sales from your trading business if the cost of sales reflected in the
financial statements is P300,000?
Solution:
𝑎 𝑐
Write the proportion for the given problem using the form = .
𝑏 𝑑
𝑪𝒐𝒔𝒕 𝒐𝒇 𝑺𝒂𝒍𝒆𝒔 𝟑
=
𝑻𝒐𝒕𝒂𝒍 𝑵𝒆𝒕 𝑺𝒂𝒍𝒆𝒔 𝟓
𝟑𝟎𝟎,𝟎𝟎𝟎 𝟑
=
𝑏 𝟓
Cross multiply and solve for b.
3𝑏 = 5 × 300,000
3𝑏 1,500,000
=
3 3
𝒃 = 𝟓𝟎𝟎, 𝟎𝟎𝟎
Page | 13
If the ratio of the company’s cost of sales to the total net sales was 3 : 5, then the total net
sales was P500,000 if the cost of sales reflected in the financial statement is P300,000.
Example 7:
Your financial analyst has computed your firm’s current ratio by dividing the current
assets by the current liabilities. Based on her computations, the firm’s current ratio is 3.5 to 1.
What is the value of your firm’s current assets if the current liabilities reflected at end of year
amount is P150,000?
Solution:
𝑎 𝑐
Write the proportion for the given problem using the form =
𝑏 𝑑
2 50,000
=
3 𝑑
Cross multiply and find the missing term in the proportion.
2𝑑 = 3 × 50,000
2𝑑 = 150,000
d = 75,000
He should expect a net sales of P75,000 if his estimated labor cost for next month is
P50,000.
KINDS OF PROPORTION
There are three kinds of proportion, namely, direct, indirect or inverse proportion, and
partitive proportion.
1. Direct Proportion – exists when two quantities, x and y, of the proportion vary directly
or are in direct variation; that is if x increases (or decreases), then y increases (or
decreases) also by the same factor or constant. For example, the number of workers is
directly proportional to the number of production units. If you increase the number of
workers, the number of production units also increases. If you decrease the number of
workers, the number of production units will also decrease. A direct proportion is
𝑥1 𝑥2
written as: = .
𝑦1 𝑦2
Example 8:
XYZ Garments produces 100 units of children dresses a day with its current
workforce of 25 sewers. The owner has projected an increase in the demand of their
children dresses. She planned to hire additional 5 sewers. How many children dresses
will XYZ Garments produce with the addition of 5 sewers?
Solution:
Since the given problem involves direct proportion, write the proportion as
𝑥1 𝑥2
=
𝑦1 𝑦2
𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑂𝑢𝑡𝑝𝑢𝑡 𝑁𝑒𝑤 𝑂𝑢𝑡𝑝𝑢𝑡
=
𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑊𝑜𝑟𝑘𝑓𝑜𝑟𝑐𝑒 𝑁𝑒𝑤 𝑊𝑜𝑟𝑘𝑓𝑜𝑟𝑐𝑒
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100 𝑥2
=
25 30
Then cross multiply and solve for the missing term.
25𝑥2 = 100 × 30
25x2 = 3,000
25𝑥2 3,000
=
25 25
x2 = 120
Therefore, 120 children dresses will be produced by XYZ Garments with the
additional 5 sewers.
2. Indirect or Inverse Proportion – exists when two quantities x and y, of the proportion
are inversely proportional. It means x varies inversely with y, or x is inversely
proportional to y, that is, as x increases, y decreases. For example, the more workers you
have, the lesser the time it will take you to complete or finish the job. Indirect or inverse
proportion is written as
𝑥1 𝑦2
=
𝑥2 𝑦1
Example 9:
The local government officials are very concerned about providing the needs of
their constituents especially in times of calamities. They have to make sure that they have
enough supplies of relief goods. Based on their inventory analysis, the relief goods in the
evacuation center can still feed 50 families for 7 days. How long would the relief goods
last if there were additional 10 families who were rescued and brought to the evacuation
center?
Solution:
Since the problem involves indirect or inverse proportion, set up the proportion
as,
𝑥1 𝑦2
=
𝑥2 𝑦1
𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐹𝑎𝑚𝑖𝑙𝑖𝑒𝑠 𝑁𝑒𝑤 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐷𝑎𝑦𝑠 𝑡ℎ𝑒 𝑅𝑒𝑙𝑖𝑒𝑓 𝐺𝑜𝑜𝑑𝑠 𝑤𝑖𝑙𝑙 𝐿𝑎𝑠𝑡
=
𝑁𝑒𝑤 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐹𝑎𝑚𝑖𝑙𝑖𝑒𝑠 𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐷𝑎𝑦𝑠 𝑡ℎ𝑒 𝑅𝑒𝑙𝑖𝑒𝑓 𝐺𝑜𝑜𝑑𝑠 𝑤𝑖𝑙𝑙 𝐿𝑎𝑠𝑡
Let x be the number of days that the new number of families can be fed.
50 𝑥
=
60 7
60x = 50 × 7
60x = 350
𝟑𝟓 𝟓
𝒙= 𝒐𝒓 𝟓 days
𝟔 𝟔
𝟓
With 60 families in the evacuation center, the relief goods will only last for 𝟓 𝟔 days.
3. Partitive Proportion – refers to a kind of proportion where the given total is partitioned
or divided into equal or unequal parts depending on the given ratios.
Page | 15
Example 10:
A man stated in his last will and testament that he is giving P50 million as
inheritance to his son and two daughters. Being the eldest among his children, his son will
receive twice the share of the two daughters. How much will each of his children receive?
Solution:
Divide the amount of inheritance by the sum of the terms of the ratio.
50 50
= = 𝟏𝟐. 𝟓 (Eliminate the zeros first to easily get the base amount)
2+1+1 4
Multiply the quotient by each term of the ratio.
P12.5 million × 2 = 𝐏𝟐𝟓 𝐦𝐢𝐥𝐥𝐢𝐨𝐧
𝑃12.5 𝑚𝑖𝑙𝑙𝑖𝑜𝑛 × 1 = 𝐏𝟏𝟐. 𝟓 𝐦𝐢𝐥𝐥𝐢𝐨𝐧
𝑃12.5 𝑚𝑖𝑙𝑙𝑖𝑜𝑛 × 1 = 𝐏𝟏𝟐. 𝟓 𝐦𝐢𝐥𝐥𝐢𝐨𝐧
A. Clarifying Understanding
Write the following ratios in their simplest form.
1. Ratio of the ages of a daughter who is 12 years old and her mother who is 48 years
old.
12 ÷12 1
Ans: =
48÷12 4
2. Ratio of black shirts to white shirts if there are 6 black shirts and 8 white shirts.
3. Ratio of 120 minutes to 3 hours.
Answer the following briefly.
1. Compare and differentiate ratio from rate.
2. Give examples of proportions that illustrate real-life situations.
B. Processing Questions:
1. What does a balanced life of a student mean to you? Is it important for students to
have a balanced life? What can you do to achieve it?
C. Lifelong Learning
The key is not to prioritize what’s in your schedule but to schedule your priorities.
-----Stephen Covey
Prepared by: Checked by:
JOSIT M. DUNTAR J. KIM O. BATULA
Subject Teacher SHS Principal
Page | 16
REPUBLIC OF THE PHILIPPINES
PROVINCE OF ZAMBOANGA DEL NORTE
SAINT JOSEPH COLLEGE OF SINDANGAN INCORPORATED
Senior High School Department
BUSINESS MATHEMATICS
NAME: ___________________________________ SCORE: ____________________
GRADE / SECTION: ______________________ DATE: _____________________
RATIO AND PROPORTION
Activity No. 1 – Problem Solving
I. Problem solving (Part 1).
1. You and your business associate are planning to offer your stretch slim fit tapered jeans on sale
at P990. The original price of the jeans was P1,260. The cost of the jeans is 70% of the original
price. Your business associate is interested in determining the ratio of the sale price to the original
price before implementing your plan. What is the ratio of the sale price to the original price in
decimal and in percent? Would this be a good marketing plan?
2. A young entrepreneur sells two products, A and B. The selling price per unit for product A is
P120 and P54 for product B. Based on the sales record, there were 2,000 and 5,000 units sold for
product A and product B, respectively. The entrepreneur wanted to compare the sales of her two
products. What is the ratio of the sales of product A to the sales of product B? Interpret the ratio
obtained.
3. The deb-to-equity ratio is computed to compare resources provided by creditors with resources
provided by shareholders. If ABC Company has total liabilities of P880,000 and total equity of
P3,120,000, what is the debt-to-equity ratio of ABC company? Interpret the value of the ratio
obtained.
𝑇𝑜𝑡𝑎𝑙 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
Use this formula in computing: 𝐷𝑒𝑏𝑡 − 𝑡𝑜 − 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =
𝐸𝑞𝑢𝑖𝑡𝑦
4. Joana had a budget allocation of P15,000 for materials and P75,000 for direct labor. What is the
ratio of the budget allocation for materials to the budget allocation for direct labor?
5. As the financial manager of your firm, you are interested in the financial statement analysis made
by your financial assistant. What was the current ratio calculated by your financial assistant if the
value of the firm’s current assets is P525,000 and the value of its current liabilities at year-end is
P150,000?
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
Use this formula in computing: 𝐷𝑒𝑏𝑡 − 𝑡𝑜 − 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
6. You were hired as the operations manager of a store. You took the initiative to do an analysis of
the store’s financial statements. The financial statements reflect material cost of P36,000 and labor
cost of P45,000. What is the ratio of the store’s material cost to labor cost?
II. Problem solving (Part 2).
1. Worker A receives P1,792 for his day’s work of 8 hr, while worker B receives P1,500 for his half
day’s work of 4 hr. since their working hours vary, it is difficult to compare the wages received
by the two workers on the basis of their take home pay for the day. However, a comparison of
their take home pay is possible using a basic unit rate, which is their hourly rate. So, what is their
Page | 17
unit wage or rate per hour? Assuming worker A and worker B are doing the same task and have
no other difference in their working condition, who gets the better pay?
2. You need paper plates for the event you are organizing. So, you went shopping and found several
options with the following prices:
Brand A P49.50 per pack (100 pcs)
Brand B P24.00 per pack (50 pcs)
Brand C P12.25 per pack (25 pcs)
Brand D P11.50 per pack (24 pcs)
Assuming all these brands have the same quality and have the requirements that you need
for a paper plate, which brand is the best buy if you need 2,000 pieces?
(Hint: To determine which brand is the best buy, determine the unit price of the plates for each
brand.)
3. A job applicant is able to finish typing an 18-page document in 45 minutes. The document
contains 160 words per page on the average. The standard rate for typing such document is set at
60 words per minute. As the HR manager, would you accept the job applicant?
4. You are the company auditor and you were instructed to closely monitor the refund of fuel
expenses made by delivery truck drivers. On the average, 1 L of fuel is consumed for every 7 km
distance traveled. Diesel fuel costs P30.50/L. How much should be allowed for gas refund per
kilometer?
III. Problem Solving (Part 3)
1. A franchisee knows that his labor cost to net sales ratio is 2 to 3. If his estimated labor cost for
next month is P50,000, how much is the net sales that he should expect next month?
2. You and your best friend decided to become partners in spa business. You have only P375,000 to
invest in this business. How much should your best friend provide if you have agreed on an
investment ratio of 1 : 3 between you and your friend?
3. The previous year’s financial statements reflect that your business had net sales of P2,000,000 and
a gross profit of P500,000. Based on your analysis of these financial statements, your business will
continue to thrive and you have projected your net sales at P2,500,000. What is then your
projected gross profit?
4. A contractor has a job which should be completed in 80 days. If he fails to finish the job on time,
he has to pay P2,000 for each day of delay for liquidated damages. At present, he has 60 men on
the job and it is estimated that they will finish it in 100 days. How many more men should the
contractor add so he can complete the job on time and avoid paying penalty charges?
5. A new graduate of an entrepreneurship program plans to divide his mutual trust fund worth
P1,000,000 to three types of small scale business in the ratio of 1 : 2 : 3. How much should he
allocate to each type of business that he plans to put up?
Rubrics:
5 points (each unit of answer) – clear and complete solution, minimal erasures, answers are
enclosed in a box, or double-underlined and labeled properly
1-point deduction – for every requirement not met.
Prepared by: Approved by:
JOSIT M. DUNTAR J. KIM O. BATULA
Subject Teacher SHS Principal
Page | 18