Multiple choice

The ratio of all operating expenses (i.e. materials used, labour, factory overheads, office and selling expenses) to sales is the _______ ratio.

  1. Gross Profit

  2. Net Profit

  3. Operating

  4. Activity

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The operating ratio is a financial term defined as a company's operating expenses as a percentage of revenue. Operating Ratio = Operating Expense / Net Sales