paid by A to B .
How can you calculate new and sacrifice ratio at the time of admission of new partner
Calculation of new and sacrifice ratio at the time of admission of new partner is very easy . If you want to calculate new profit sharing ratio , you should only calculate the difference between old and sacrifice ratio . Sacrifice ratio means total sacrifice of old partner for new partner .
It is given by old partner to new partner so if you want to calculate new profit sharing ratio , you just deduct this from old profit sharing ratio . But in different situation , partner can make condition at the time of admission , and fix his surrender share for new partner from his share then we first calculate sacrifice ratio and then calculate new profit sharing ratio . For example Ram and sham are the two partners with profit sharing ratio are 3:2 . Sita enters in this partner ship . Both after that sita will take 1 / 5 as new share , If agree that Ram will give 20 % of his share and balance will give by Sham then we will calculate both new and sacrifice profit sharing ratio as bellow way .
Solution : - Ram ’ s sacrifice = 3 / 5X20 % = 0.12 Sham ’ s sacrifice = 1 / 5-0.12 = 0.08 New profit share of Ram = 3 / 5 -0.12 = 0.48 New profit share of Sham = 2 / 5 – 0.08 = 0.32 New profit share of Sita = 1 / 5 = 0.20