If interest expense is part of total operating expenses, the total interest expense (including adjustments) must be subtracted from operating expenses in the operating expense ratio
If revenues are too low or expenses too high, consider that the operating expense ratio
shows the relationship between revenues and expenses, while the expenses per resident-day index is based solely on operating expenses.
Although nursing homes have a wide range of expenses, making it extremely difficult to compare the subject with other nursing homes line by line, at the very least the appraiser should discuss total operating expense ratios
of the subject and other nursing homes.
The operating expense ratio
measures the steepness of a line extending from the origin (where the vertical and horizontal axes intersect) to a point on the left-side OE curve.
The sale having the most similar gross income, vacancy level, and operating expense ratio
on a square-foot basis is called the most comparable and the unit indicator from this sale is applied to the subject.
Institutional investors estimated the company's operating expense ratio
for this year to stand at 16% and annual gross margin at around 30%.
If your operating expense ratio
is higher than 65 percent but your operating expenses per resident day are "normal," chances are you are collecting abnormally low revenues, and it may be time to revisit your pricing strategy.
The margin downturn is projected to be partially offset by significant improvement in the operating expense ratio
Retail gross margin is expected to decline moderately, with offsetting improvement in the operating expense ratio
5%, but consolidated gross margin is expected to continue to decline, partially offset by significant improvement in the operating expense ratio