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The operating ratio can be used to determine the efficiency of a company's management by comparing operating expenses to net sales. It is calculated by dividing the operating expenses by the net sales. The smaller the ratio, the greater the organization's ability to generate profit. The ratio does not factor in expansion or debt repayment. [2]
The efficiency ratio indicates the expenses as a percentage of revenue (expenses / revenue), with a few variations – it is essentially how much a corporation or individual spends to make a dollar; entities are supposed to attempt minimizing efficiency ratios (reducing expenses and increasing earnings). The concept typically applies to banks.
On an income statement, "operating expenses" is the sum of a business's operating expenses for a period of time, such as a month or year. In throughput accounting , the cost accounting aspect of the theory of constraints (TOC), operating expense is the money spent turning inventory into throughput . [ 4 ]
A fund with a high expense ratio could cost you 10 times – maybe more! – what you might otherwise pay. ... And that $10,000 fee is not just the money today, but the greater amount it could ...
In accounting and finance, earnings before interest and taxes (EBIT) is a measure of a firm's profit that includes all incomes and expenses (operating and non-operating) except interest expenses and income tax expenses. [1] [2] Operating income and operating profit are sometimes used as a synonym for EBIT when a firm does not have non-operating ...
The debt service coverage ratio (DSCR), also known as "debt coverage ratio" (DCR), is a financial metric used to assess an entity's ability to generate enough cash to cover its debt service obligations, such as interest, principal, and lease payments. The DSCR is calculated by dividing the operating income by the total amount of debt service due.
The Land of Lincoln, Illinois includes the nation's third largest city, Chicago, to the north, and abundant agriculture, industry, and natural resources throughout its central and southern The 4 ...
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