Berry Ratio

What Does Berry Ratio Mean?
The ratio of a company's gross profits to operating expenses. This ratio is used as an indicator of a company's profits in a given period of time. A ratio coefficient of 1 or more indicates that the company is making profit above all variable expenses, whereas a coefficient below 1 indicates that the firm is losing money.

The formula is as follows:

Berry Ratio

Investopedia explains Berry Ratio
This ratio attempts to measure a firm's profitability. A higher coefficient means that the firm is more profitable, while a lower coefficient means the firm in not as profitable. Using this method in conjunction with other profit-level indicators will ensure a higher level of validity.

Related Terms

Expense Ratio
Expenses
Gross Margin
Operating Expense
Profit
Profit Margin
Variable Cost
More Related Terms

Related Links

Ratio Analysis Tutorial - If you don't know how to evaluate a company's present performance and its possible future performance, you need to learn how to analyze ratios.
Understanding The Income Statement - Learn how to use revenue and expenses, among other factors, to break down and analyze a company.
Understanding The P/E Ratio - Learn what the price/earnings ratio really means and how you should use it to value companies.

Rate this Term: Your Rating: Overall Rating: Vote Now!