Operating Expense Ratio Calculator

Formula

The formula to calculate the Operating Expense Ratio is:

\[ \text{OER} = \left( \frac{\text{Operating Expense}}{\text{Gross Operating Income}} \right) \times 100 \]

Where:

$\text{Operating Expense}$ is an expense incurred in carrying out an organization's day-to-day activities, but not directly associated with production.
$\text{Gross Operating Income}$ is an accounting figure that measures the amount of profit realized from a business's operations, after deducting operating expenses such as cost of goods sold (COGS), wages, and depreciation.

The operating expense ratio is a measure of what it costs to operate a piece of property compared to the income that the property brings in.

Let's assume the following values:

Using the formula:

\[ \text{OER} = \left( \frac{1,254}{5,684} \right) \times 100 \]

Evaluating:

\[ \text{OER} = 22.06\% \]

The Operating Expense Ratio is 22.06%.