what is an operating ratio 
the term operating ratio refers to the efficiency of a company s management by comparing the total operating expense opex of a company to net sales the operating ratio shows how efficient a company s management is at keeping costs low while generating revenue or sales the smaller the ratio the more efficient the company is at generating revenue vs total expenses investopedia eliana rodgersformula and calculation of operating ratiothe formula used to calculate the operating ratio is o p e r a t i n g r a t i o o p e r a t i n g e x p e n s e s c o s t o f g o o d s s o l d n e t s a l e s operating ratio frac operating expenses cost of goods sold net sales operatingratio netsalesoperatingexpenses costofgoodssold 