If "benefits, claims, and credit losses", for 11,941, are added to operating expenses, the efficiency ratio worsens to 51,109 / 77,442 = 0. The jump in costs outweighed the 9 increase in consolidated revenue from operations to 26. Revenues, net of interest expense: 77,442 Summary of S. Total expenses were up 45 at 24.49 billion rupees.If expenses are $60 and revenue is $80 (perhaps net of interest revenue/expense) the efficiency ratio is 0.75 or 75% (60/80) – meaning that $0.75 are spent for every dollar earned in revenue. For measuring efficiency can be used receivable collection period ratio.įormula Efficiency = input / output Efficiency ratios for a given year may therefore be used to determine whether an enterprise has generated enough cash in relation to other years and in relation to other institutions (Koen and Oberholster, 1999). Wisconsin Department of Revenue: Meal and Entertainment Expenses Common.
It relates to operating leverage, which measures the ratio between fixed costs and variable costs.Įfficiency means the extent to which cash is generated over time and relative to other enterprises. The efficiency ratio indicates the expenses as a percentage of revenue ( expenses / revenue), with a few variations – it is essentially how much a corporation or individual spends to make a dollar entities are supposed to attempt minimizing efficiency ratios (reducing expenses and increasing earnings). Net Income, also known as net profit, is a companys total earnings after subtracting all its expenses.
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