Page 75 - BUSINESS MATHEMATICS MODULE 1 (WHOLE)_revised 10.20.2020

LESSON 5.B: RATIOS AND PROPORTIONS

Example 2.

Last year, a corporation declared current assets of ₱725,000 compared to ₱340,000

current liabilities. What is the current liabilities?

Solution:

Current Assets ₱725,000 2.1
= = 2.1 = 2.1 1
Current Liabilities ₱340,000 1

The current ratio of 2.1 to l means that for every ₱1.00 of current liabilities, the

business possesses ₱2.10 in current assets.

• Proportion

We know that and are simply different names for the same number. This is so because

they are equal.

A statement that two ratios are equal is called proportion.

Examples:

a. 2 = 4 b. 3 = 9
5 10 7 21
We can always check a proportion this way:

4
a. 2 = b. 3 = 9
5 10 7 21
2 ∙ 10 = 5 ∙ 4 3 ∙ 21 = 7 ∙ 9
20 = 20 63 = 63

2 4
The term = is read as the ratio of 2 to 5 equals the ratio of 4 to 10 and can
5 10
also be expressed in the following way:

⏞
2 ∶ 5 = 4 ∶ 10

⏟

The middle terms 5 and 4 are the means and the outer terms 2 and 10 are called
the extremes. The rule for proportions is "The product of the means equals the product of
the extremes" as:
a. 2 ∶ 5 = 4 ∶ 10 b. 3 ∶ 7 = 9 ∶ 21
2 ∙ 10 = 5 ∙ 4 3 ∙ 21 = 7 ∙ 9
20 = 20 63 = 63
LESSON 4: FRACTIONS 4.5 | P a g e