Operating Ratio Calculator

Calculate Operating Ratio (OPR)



Formula

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

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

Where:

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.