Operating Expense Ratio Calculator
Calculate your operating expense ratio by dividing operating expenses by revenue to see how much of each sales dollar covers overheads.
Your results
Calculation breakdown
- Operating expense ratio
- (Operating expenses ÷ Revenue) × 100
Worked example
A business with $70,000 in overheads like rent, admin and marketing against $300,000 revenue has an operating expense ratio of about 23.3%.
Assumptions
- Exclude cost of goods sold, interest and tax from operating expenses.
- A lower ratio generally means more revenue is available for profit before interest and tax.
- Compare the ratio over multiple periods to spot cost creep.
How this calculator works
This calculator divides total operating expenses, such as rent, admin and marketing, by revenue over the same period to show what percentage of revenue is consumed by overheads before profit.
Frequently asked questions
What is excluded from operating expenses here?
Cost of goods sold, interest and tax are excluded — this ratio focuses on overheads like rent, admin, marketing and insurance.
What is a healthy operating expense ratio?
It depends heavily on the business model, but a lower ratio generally means more revenue converts to profit before interest and tax.
How does this differ from net profit margin?
Operating expense ratio only looks at overheads relative to revenue, while net profit margin accounts for every cost including COGS, interest and tax.
Results are estimates only and are not financial, tax, legal or credit advice.