Respected Sir,
Management Accounting was my subject in Graduation and Post Graduation. As per the concept of Management Accounting the higher is the Operating Ratio the more is the Cost and less is the revenue and the Lower is the Operating Ratio is the reverse process. Now recently there is a news that IR's operating ratio is improved by 91.3% the correct interpretation of this as per the principles of management accounting is if your income is Rs 100 then your expenditure is Rs 91.30. So savings is only Rs 8.70. (I don't know how they comment that Operating Ratio has been improved in the News)
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if we critically observe the recommendations of this Bibek Debroy Committee then we can see that this Committee aims at the restructuring of IR by boosting it's financial condition.IR has to think about the implementation of these recommendations specially Accounting related to bounce back to the Profit Making entity from a Loss Making Dying Entity which it is now currently. Now the question is if IR don't have the Guts to amend their accounting system then nevertheless they will see the ray of Profit in their Operation. All are hypothetical, no real picture you can obtain from any sector of IR due to it's Orthodox Faulty Accounting Concept. If this scenario continues Central govt won't be able to run this Transport System in Future, as because Subsidy has a limit, it can't be unlimited.
Just View the Following Link Sir:
click here
In the Significance and interpretation section of this Link you will find the Following Sentence:
"A low operating ratio means high net profit ratio i.e., more operating profit." So the recent news relating to Interpretation of Operating Profit of IR is incorrect which is proved. Unfortunately people are mislead by this news which is not desirable on the part of IR. (/news/post/ 235876)