Overhead Ratio

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Dictionary Says

Definition of 'Overhead Ratio'

A comparison of operating expenses and total income that is not directly related to the production of a good or service. A firm's operating expenses are expenditures that result from normal, day-to-day business operations. Operating expenses include advertising, office rent, professional fees, utilities, insurance, machinery maintenance, depreciation or plants or machinery, etc.

Overhead ratio = Operating Expenses / (taxable net interest income + operating income)
Investopedia Says

Investopedia explains 'Overhead Ratio'

Overhead ratio is a metric that allows companies to evaluate expenses as a percentage of income. In general, a company strives to achieve the lowest operating expenses possible without sacrificing its goods and/or services or competitiveness within the industry. Cutting expenses has a positive effect on the overhead ratio; however, a company must balance these cuts with maintaining the quality of business.
Search results for

'Overhead Ratio'

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    ... A higher sales-per-employee ratio indicates that the company can operate on low
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    ... With 92% of their students taking classes online it keeps the overhead low because
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    ... fund, with increased marketing, trading and research costs and higher overhead than
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    ... The ratio's percentage represents the number of pennies there are in each ... the expense
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  • CFA Level 1 Study Guide - Financial Ratios - Operating ...

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    ... Cycle; 13.9 Life Cycle Analysis: The Industry Life Cycle; 13.10 The Concentration
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    ... 80% of their premiums (known as a loss ratio or combined ratio) for claims ... low-cost
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  • Earnings Power Drives Stocks

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    ... As demonstrated by a simple example, ROA is a very easy ratio to calculate. ... revenues
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  • Don't Answer Avon's Call

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    ... it to be cheap because of a relatively low P/E ratio and a nice ... costs by sourcing
    globally rather than locally and instituting a zero overhead growth policy to ...

  • The Investment Case For Old Dominion

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    ... Old Dominion has an enviable operating ratio, despite the fact that it keeps adding
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  • Analyzing Show Biz Stocks

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    ... as bigger companies tend to enjoy economies of scale, with overhead expenses supported
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