Meaning & use
opex ratio
Last updated
Meaning
nouncountablebusinessfinance
A financial measure showing operating expenses as a percentage of revenue or another base figure.
Grammar: Countable; often used with 'the': The opex ratio fell to 30%.
Patterns
- the opex ratio
- a high opex ratio
- improve the opex ratio
The opex ratio improved from 45% to 38% after the cost-cutting program.
Analysts watch the opex ratio closely to judge how efficiently a company is run.
A lower opex ratio usually means the company keeps more of each dollar of revenue.
Word forms
| plural | opex ratios |
|---|
Common combinations
- improve the opex ratio
- The new software helped improve the opex ratio.
- high opex ratio
- A high opex ratio can signal poor cost control.
- lower the opex ratio
- They lowered the opex ratio by renegotiating supplier contracts.
- opex ratio of 40%
- The company reported an opex ratio of 40% last year.
Synonyms and how they differ
- operating expense ratio
- This is the full form of the same idea; it is more formal and often used in official documents.
- efficiency ratio
- Efficiency ratio is a broader term used in banking and other industries; it may include different costs, so it is not exactly the same.
Word family
- opex noun
- Short for operating expenses; the costs of running a business.
- ratio noun
- A relationship between two amounts, shown as a number.
Commonly confused: opex ratio or capex ratio?
opex ratio vs capex ratio
Capex ratio measures capital expenditure, not operating expenses, so the two ratios look at different kinds of spending.
Practice
The opex ratio is calculated by dividing operating expenses by ______.
Choose one answer.
The opex ratio compares operating expenses to revenue, the income from sales. Profit, debt, and assets are different measures and would give a different ratio.
Make it your own
Write a sentence using “opex ratio”, then check it and compare it with the examples above.