New Profit Sharing Ratio | Sacrificing Ratio | Gaining Ratio | Part 2 || By Amit sir | In Hindi

In this video we will try to understand about the different cases of calculating new profit sharing ratio at the time of Admission of a Partner.

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Sacrificing Ratio
Sacrificing ratio is the ratio in which old or existing partners forego, i.e., sacrifice their share of profit in favor of the new or incoming partner.
Gaining Ratio
It is the ratio in which partners have agreed to gain their shares in profit from other partners of the firm.
Sacrificing Ratio = Old Ratio – New Ratio

Gaining Ratio = New Ratio – Old Ratio

or
Gaining / Sacrificing ratio = Old ration – New ratio

Case 1: When the share of new or incoming partner is giving without giving the details of the sacrifice made by the old or existing partners

In this case, we will assume that old partners will make the sacrifice in their old profit sharing ratio. Therefore, sacrificing ratio will always be the old profit sharing ratio.
For Example:-
Quest. A and B are partners sharing profits in the ratio of 3:1. C is admitted for the 1/8th share of the profits.

Solution : Since C’s share is given without mentioning as to what C acquires from A and B separately, C acquires his share from A and B in their old profit sharing ratio. Therefore, sacrificing ratio by A and B will be 3:1.
Firm’s share = 1
Remaining share = 1-  1/8
=  7/8
Now,

A’s new share = 3/4 x  7/8   =  21/32

B’s new share =   1/4  x  7/8  =  7/32

C’s share =  1/8   x  4/4 =  4/32

New profit sharing ratio of A : B : C
= 21 : 7 : 4



Case 2: When new partner purchases his share from the old partners in a particular ratio

In this case, new partners will purchase his share from old partners in a particular ratio. So we will deduct the amount that the new partner will purchase old partners in their particular ratio and then we will calculate the new profit sharing ratio of all the partners.