This glossary uses Visual Finance™ to bring financial terms to life. Each example shows data from the Round Number Company, a fictional business with simplified figures to make learning easier. For more details, visit 'How to Read Visual Finance'.
Ratio: Operating Expense as a percentage of Sales
Example: The Round Number CompanySales = 300; OpEx = 72 OpEx Ratio = 72/ 200 = 36 % |
(OpEx (Operating Expense) is the after-COS expenses related to normal operation of the business including R&D, advertising, salaries, and rent. Depreciation may, or may not, be included in OpEx.)
The OpEx Ratio measures the proportion of revenue spent on operating expenses.
The terms Operating Ratio and OpEx Ratio sound similar - but they are different measurements!
The terms Operating Ratio and OpEx Ratio sound similar - but they are different measurements!
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Calculator for OpEx Ratio
Calculator for Operating Ratio
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The above is our generic explanations of common corporate financial terminology. Actual meanings can vary widely from company to company; in order to have the correct internal definition you need to ask your Finance Department, "What do you mean by that?"
term list.