What Does Taking Operating Expenses As A Portion of Revenue Tell Us?
Operating expenses as a percentage of revenue tells investors how much of the total sales a company earned was spent on operating expenses. The lower this percentage is, generally, the better.
For example, if a company earned $100 in revenue selling widgets, but spent $30 on operating expenses over that period, it will have a 30% operating expenses to revenue ratio ($30 / $100 is .3 taken as a percent gives 30%).
Published: 6/03/2021
