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)
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