Meaning: Gaining Ratio is the ratio in which the continuing partners acquire the share from the retiring or deceased partner. Sacrificing Ratio refers to the ratio in which a partner surrenders a portion of their profit share, indicated when the calculation of gaining share results in a negative value (sacrifice).

Effect on Partner’s Share of Profit: In the case of Gaining Ratio, the partner's share of profit increases as the new share is the sum of the old share and the acquired share. Conversely, in Sacrificing Ratio, the partner's share of profit decreases as they give up a part of their existing share to others.

Mode of Calculation: Gaining Ratio is calculated using the formula: New Share – Old Share. A positive result indicates a gain. Sacrificing Ratio is determined when this calculation yields a negative figure, representing the amount of share sacrificed by the partner.

When to Calculate: The calculation of Gaining Ratio arises primarily when the new profit sharing ratio of the continuing partners is specified, or upon the retirement/death of a partner. Sacrificing Ratio is calculated to determine the compensation for goodwill, as gaining partners must compensate the sacrificing partners to the extent of their gain.