New Ratio

In partnership, when a new partner comes or go after retirement, earlier ratio will be effected. New ratio is just difference between old ratio and sacrifice ratio at the time of admission or sum of old ratio and gaining ratio at the time of death or retirement of any partner.

Suppose

A, B and C are three partner and getting 1:1:1

d comes in partnership firm and gets equal share of profit.

So, new profit ratio will be again 1:1:1:1

But do you know how we can we calculate the new profit sharing ratio of A, B and C

just simple formula

New Ratio = Old ratio - Sacrifice Ratio

In above case, D has to get 1/4 share from old partner. He will get this share from old partner in old sharing ratio

A will sacrifice = 1/4 X 1/3 = 1/12

B will sacrifice = 1/4 X 1/3 = 1/12

C will sacrifice = 1/4 X 1/3 = 1/12

A's new ratio = 1/3 -1/12

or = 3/12 = 1/4

B's New ratio = 1/3 - 1/12

or 3 / 12 = 1/4

C' new ratio = 1/3 - 1/12

or 3/12 = 1/4

D has already New ratio = 1/4

But in case death or retirement, we will calculate new ratio with following formula

New Ratio = Old Ratio + Gaining Ratio
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