Let 1 liter milk cost Rs 1. To gain 25%, selling price = Rs 1.25. If x liters water added to 1 liter milk, total quantity = (1+x) liters sold for Rs 1.25. Cost = Rs 1, profit = Rs 0.25 = 25% of cost. So we must sell (1+x) at Rs 1.25, meaning price per unit = 1.25/(1+x) = 1. Therefore x = 0.25. Ratio water:milk = 0.25:1 = 1:4.