Operating Ratio

Filed Under » ,
Dictionary Says

Definition of 'Operating Ratio'

A ratio that shows the efficiency of a company's management by comparing operating expense to net sales. Calculated as:

Operating Ratio
Investopedia Says

Investopedia explains 'Operating Ratio'

The smaller the ratio, the greater the organization's ability to generate profit if revenues decrease. When using this ratio, however, investors should be aware that it doesn't take debt repayment or expansion into account.

Articles Of Interest

  1.

    A Look At Corporate Profit Margins

    Take a deeper look at a company's profitability with the help of profit margin ratios.

  2. A Primer On The Railroad Sector

    The railroad industry might seem antiquated, but it remains an important service that reaches all corners of the country.

  3. Working Capital Works

    A company's efficiency, financial strength and cash-flow health show in its management of working capital.

  4. Doing More With Less: The Sales-Per-Employee Ratio

    If used properly, this ratio can give you insight into a company's productivity and financial health.

  5. 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.

  6. Analyzing Operating Margins

    Find out how to put this important component of equity analysis to work for you.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Yield Elbow

    The point on the yield curve indicating the year in which the economy's highest interest rates occur. The yield elbow is the peak of the yield curve, signifying where the highest interest rates occurred.

  2. Xenocurrency

    A currency that trades in markets outside of its domestic borders.

  3. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.

  4. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.

  5. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.

  6. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.
Trading Center
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=a40bc3896b2d61f56ab155e12554805b