Operating Ratio Calculator

Formula

The formula to calculate the operating ratio (OPR) is:

\[ OPR = \frac{E}{S} \times 100 \]

Where:

$ OPR $ is the Operating Ratio (%).
$ E $ is the operating expenses ($).
$ S $ is the sales ($).

Example

Let's say the operating expenses ($ E $) are $50,000, and the sales ($ S $) are $200,000. Using the formula:

\[ OPR = \frac{50000}{200000} \times 100 \]

We get:

\[ OPR = 25 \]

So, the operating ratio ($ OPR $) is 25%.

What is Operating Ratio?

The operating ratio is a measure of a company's operational efficiency. It is calculated by dividing the operating expenses by the total sales and multiplying by 100 to get a percentage. A lower operating ratio indicates higher efficiency, as it means a smaller proportion of sales is being consumed by operating expenses.