Total operating expenses divided by revenue. Below 0.8 indicates a healthy 20%+ operating margin. Above 1.0 means the company isn't covering operating costs with revenue. A declining ratio signals improving efficiency.
Formula
Description
The total operating cost per dollar of revenue. This is a comprehensive efficiency measure that includes COGS, SGA, R&D, and other operating costs. A ratio below 1.0 means the company is operationally profitable before interest and taxes.
Interpretation
Below 0.8 indicates a 20%+ operating margin, which is strong. Above 1.0 means the company is not covering its operating costs with revenue. The trend is as important as the level. Declining OpEx ratio indicates improving efficiency.
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Total revenue divided by employee headcount. Measures workforce productivity and business scalability. Technology companies with platform models tend to lead. Above $300,000 is generally strong.
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