Operating ratios

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Operating ratios

Ratios that measures a firm's operating efficiency. Examples include profit margin, and sales to assets.

Operating Ratio

A ratio of a company's operating expenses to its sales or revenue. A lower operating ratio is considered ideal because it indicates that, in the event of a decline in sales or revenue, a company will maintain profitability. Most firms desire an operating ratio below 0.80.
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Our commitment to efficiency, asset optimization, and operational excellence has produced yet another record-low operating ratio.
Regular review of operating ratio, defined as the relative relationship between various types of financial data, is one way to avoid such fiduciary traps.
In addition to the financial and operating ratios, statistical data covered in the survey include distribution of 2002 sales dollars, net sales/employee hours, value added per employee, net sales/production worker hours, total employment costs/net sales, production worker employment costs/net sales, total employment costs/pounds shipped, production worker employment costs/pound shipped, total production-related expenses/pound shipped, profits, and changes in net sales from 2001 to 2002.
A total of 73 companies reported data for 101 plants in the SPI 2001 Financial & Operating Ratios Survey.
SPI's annual Financial & Operating Ratios Survey, a valuable benchmarking tool for plastics processors, now is available.

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