Operating expense to income ratio
factor.formula
Operating expense to income ratio:
in:
- :
The total sales expenses for the trailing twelve months (TTM) include expenses incurred in the process of selling goods and providing services, such as advertising expenses, sales staff salaries, transportation costs, after-sales service fees, etc.
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The total administrative expenses for the most recent 12-month rolling period (TTM) include various expenses incurred by the company for organizing and managing production and operation activities, such as management staff salaries, office expenses, travel expenses, depreciation, amortization of intangible assets, etc.
- :
The total operating income of an enterprise over the last 12 months (TTM) refers to the income obtained by the enterprise through operating activities such as sales of goods or provision of services, and is the main source of corporate profits.
factor.explanation
This indicator intuitively reflects the cost control ability and operating efficiency of an enterprise by calculating the proportion of the cost (sales expenses and administrative expenses) paid by the enterprise to generate operating income in a specific period to the total operating income. The lower the ratio, the more effective the cost control of the enterprise in the sales and management links, the less cost consumed per unit of income, and the stronger the profitability of the enterprise. This indicator can be used for horizontal or vertical comparisons between different enterprises or the same enterprise in different periods to evaluate the changing trends of their operating efficiency and profitability. It should be noted that due to different business models and operating characteristics in different industries, the reasonable level of this ratio may vary, so it is more meaningful to compare within the industry.