Operating Expense Ratio
Percentage of revenue consumed by operating expenses. Formula: OpEx ratio = Operating expenses ÷ Revenue. Use this calculator to understand how much of revenue goes to operating expenses. Enter total operating expenses and revenue to see the ratio as a percentage.
What is the operating expense ratio?
The operating expense (OpEx) ratio shows the percentage of revenue consumed by operating expenses. It reflects efficiency of the cost structure relative to topline.
Why it matters
- Helps compare efficiency across teams and time periods.
- Signals scalability: lower ratios at higher revenue are healthy.
- Guides budget allocation and cost optimization decisions.
How to calculate
OpEx ratio (%) = Operating expenses ÷ Revenue × 100.
Example
Operating expenses 200,000, Revenue 500,000 ⇒ OpEx ratio 40.0%.
Optimization tips
- Prioritize spend with measurable ROI; sunset underperforming initiatives.
- Automate manual workflows and leverage shared platforms.
- Renegotiate vendor contracts and consolidate overlapping tools.
FAQ
What is a good OpEx ratio? It varies by model and stage; trend direction and quality of spend matter most.
Should COGS be included? No—OpEx excludes COGS; it covers operating expenses like R&D, S&M, and G&A.
How does revenue scale affect the ratio? As revenue grows, the ratio should generally decline if the business is scaling efficiently.