Know your metric
Importance of
Operating Expense Ratio (OER)
Cost Management
Reflects how well a company controls its operating expenses.
Profitability Indicator
Higher OER can indicate issues with efficiency that may impact profitability.
Comparative Analysis
Useful for benchmarking against peers.
Drawbacks of
Operating Expense Ratio (OER)
Not Industry Specific
High OER may not necessarily indicate inefficiency in capital-intensive industries.
Excludes Non-Operating Costs
Does not account for costs outside of regular operations.
Short-Term Focus
More focused on immediate operational performance, less on long-term investments.
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