This illustrated glossary uses Visual Finance™ to provide a contextualized 'big picture' view of financial results. The examples feature data for the Round Number Company—a 'made-up company' with simplified figures. The Appendix presents an explanation of how to read Visual Finance as well as the financial statements and VF views for the Round Number Company.
Ratio: Operating Expense as a percentage of Sales
Example: The Round Number CompanySales = 300; OpEx = 72 OpEx Ratio = 72/ 200 = 36 % |
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 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.