There are many types of efficiency ratios, but all measure how well a company utilizes its resources to make a profit.  Business managers use these ratios to determine how well they are operating the business, and whether or not they have met predetermined business goals.  In addition, they use the ratios to measure themselves against industry standards and the competition.Investors use efficiency ratios in roughly the same way as managers do, but from the investor’s perspective, they are trying to determine if the business is a good investment.  Efficient operation by management is a key determinate of stock value. There are many efficiency ratios in use.  Some of the key ratios are operating margin ratio, price earning ratio, return on assets, return on equity, inventory turnover ratio, cash conversion cycle, current ratio and debt to equity ratio. Each of the different efficiency ratios focuses on a different aspect of the business.  Ultimately, when the efficiency ratios all indicate the business is being run efficiently, it means the business is profitable, and probably a good investment.