I keep chasing your question, which has evolved over the course of the thread. Your question in this latest post is different than the questions you asked (and I tried to answer) previously.
Originally Posted by
Gtrtim112
We are asking ourselves this: If we made the same amount of money per shipment as last year but with this year’s number of shipments and this year’s cost, how would our Operating Ratio have looked?
You may have been thinking this question all along but this is not the question you started out asking.
The answer to the question above is:
C68 is "this year’s cost". C13 is "this year’s number of shipments". D14 is "same amount of money per shipment as last year".
I am still not sure what you think is wrong with your solution. This number (84.81%) is lower than the actual O/R for this year (88.45%). So your O/R for this year would have been better if your cost and volume were the same as this year but you made the same revenue per shipment as last year. Your revenue per shipment was much higher last year, so of course your O/R would be higher.
This is equivalent to the formula you have in C74, although is simplified. I am not going to show a formal proof here but will if you ask.
So you already have the correct formula and it gives the correct answer to your latest question.
To recap:
Post #1
This doesn’t make sense to me because if there was a drop in revenue, the operating ratio could not have been better.
It was better because there was not a drop in revenue, there was a drop in revenue per shipment. The overall revenue went up while costs rose only a tiny bit.
Post #16
I’m thinking you may not understand O/R. To go down in percentage is positive. The lower, the better. There’s no way for the PD 1 to have been better when there was a decrease in revenue per shipment. The O/R should be been a higher percentage than the previous year.
I'm thinking I understand O/R quite well.
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