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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]
A good operating margin is needed for a company to be able to pay for its fixed costs, such as interest on debt. A higher operating margin means that the company has less financial risk. Operating margin can be considered total revenue from product sales less all costs before adjustment for taxes, dividends to shareholders, and interest on debt.
The ratio of signal to noise is an important metric when determining if a target will be detected. This signal to noise ratio is directly correlated to the receiver operating characteristics of the whole radar system, which is used to quantify the ability of a radar system. Consider the development of a radar system.
An Overview of the Return on Assets Ratio Formula Return on assets is a measure of corporate efficiency. The more a company can earn relative to its total assets, the more productive it is.
There are two main components in how to calculate DSCR: a company’s annual net operating income and its annual debt service. The formula for determining a company’s DSCR is: Net operating ...
How to calculate the current ratio. ... The formula is: Current ratio: Current assets / Current liabilities. Sample current ratios. ... or operating cash flows.
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.
The return on equity (ROE) is a measure of the profitability of a business in relation to its equity; [1] where: . ROE = Net Income / Average Shareholders' Equity [1] Thus, ROE is equal to a fiscal year's net income (after preferred stock dividends, before common stock dividends), divided by total equity (excluding preferred shares), expressed as a percentage.