Trailing Twelve Months Operating Expense Ratio
factor.formula
Rolling total operating expense ratio:
This formula calculates the rolling total operating expense ratio, where:
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It represents the total sales expenses in the most recent 12 months, reflecting the direct or indirect expenses incurred by the company to promote products and maintain customer relationships, such as sales staff salaries, advertising fees, transportation costs, etc.
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It represents the total amount of administrative expenses in the most recent 12 months, reflecting the various expenses incurred by the company to organize and manage the daily operations of the enterprise, such as management staff salaries, office expenses, research and development expenses, etc.
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It represents the total operating income for the most recent 12 months, that is, the total income earned by the company through the sale of goods or provision of services, and is the main source of income for the company's core operating activities.
factor.explanation
The rolling total operating expense ratio reflects the operating expenses consumed by a company for each unit of operating income generated in the past 12 months. The lower the ratio, the more efficient the company is in cost control and the stronger its profitability. Investors can use this indicator to compare the operating efficiency of different companies in the industry horizontally, or to observe the changes in the cost management level of the same company in different periods vertically, thereby assisting investment decisions. It should be noted that the reasonable range of this indicator may vary for companies in different industries and at different stages of development, and should be analyzed in combination with industry characteristics and company specific circumstances.