expense control efficiency ratio definition
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Efficiency ratio The efficiency ratio indicates the expenses as a percentage of revenue, with a few variations – it is essentially how much a corporation or individual spends to make a dollar; entities are supposed to attempt minimizing efficiency ratios. The concept typically applies to banks. It relates to operating leverage, which measures the ratio between fixed costs and variable costs.
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allocation efficiency allocation efficiency. Definition. How effective a market or economy is in its dispersion of capital to the most productive opportunities. A market with high allocation efficiency will provide the necessary capital to industries with potential for growth. Use this term in a sentence.
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Efficiency ratio Efficiency ratio. The efficiency ratio indicates the expenses as a percentage of revenue (expenses / revenue), with a few variations – it is essentially how much a corporation or individual spends to make a dollar; entities are supposed to attempt minimizing efficiency ratios (reducing expenses and increasing earnings). The concept typically applies to banks.
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Efficiency Ratios If a company borrows money in the form of debt, it most likely incurs interest charges on it. (Money isn't free, after all!) The interest coverage ratio measures a company's ability to meet its interest obligations with income earned from the firm's primary source of business.
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Home Treatment for Second-Degree Burns - Topic Overview Bandaging the burn. 1  If the burned skin or blisters have not broken open, a bandage may not be needed. 2  If the burned skin or blisters have broken open, a bandage is needed. 3  Wrap the burn loosely to avoid putting pressure on the burned skin.  Do not tape a bandage so that it circles a hand, arm, or leg.
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Learn About Expense Ratios and If You're Paying Too Much This fee is called an expense ratio. Expense ratios are stated in terms of the annual percentage of assets that will be charged. Here are a few examples: A fund that has an expense ratio of 1.10 charges 1.10% a year of the total assets you have in the fund.
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Expense Ratio What it is: The expense ratio is the recurring management fees for a mutual fund. A fund company charges its fund holders the expense ratio each year (expressed in terms of a percentage of the fund's assets).ow it works/Example: The expense ratio is the recurring annual fee for a fund, and should not be confused with sales fees and commissions (these are paid only upon the purchase or sale of a fund). The average expense ratio for an actively managed mutual fund is about 1.5%.
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Expense ratio Expense ratio. The percentage of the assets that are spent to run a mutual fund (as of the last annual statement). This includes expenses such as management and advisory fees, overhead costs, and 12b-1 (distribution and advertising) fees.
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operating expense ratio Definition. The mathematical relationship calculated by dividing operating expenses by potential gross income. The higher the operating expense ratio, the lower the rent must be, or the higher the operating expenses must be.efinition. The mathematical relationship calculated by dividing operating expenses by potential gross income. The higher the operating expense ratio, the lower the rent must be, or the higher the operating expenses must be.
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What is the 'Expense Ratio' The expense ratio is a measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual calculation, where a fund's operating expenses are divided by the average dollar value of its assets under management (AUM).
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Four Basic Types of Financial Ratios Used to Measure a Company's Performance Two common efficiency ratios are inventory turnover and receivables turnover. Inventory turnover is the ratio of cost of goods sold to inventory. A high inventory turnover ratio means that the company is successful in converting its inventory into sales.
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Cost-effectiveness Analysis (CEA) Cost-effectiveness Analysis (CEA). Business Terms. Email. Definition. Cost effectiveness analysis (CEA) refers to a systematic process that helps in comparing two or more courses of action by considering their relative costs and outcomes or effects.Cost effectiveness analysis is related to cost benefit analysis but there is a slight difference between them.he CEA is expressed as ratio where the health gain from a measure such as premature births prevented, years of life, etc are taken as denominator and the cost linked to the gain in health is taken as numerator. Quality adjusted life year (QALY) is the most frequently used measure of outcome.
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Definitions &Translations Freebase(0.00 / 0 votes)Rate this definition: A loss ratio is a ratio of losses to gains, used normally in a financial context. For insurance, the loss ratio is the ratio of total losses incurred in claims plus adjustment expenses divided by the total premiums earned.
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Operating Expense Ratio Operating Expense Ratio. The Operating Expense Ratio (OER) is the ratio of the total operating expenses and the effective gross income of the property. Operating expenses are costs associated with the operation and maintenance of the property. Typical property expenses include such items as property taxes, insurance, pest control, utilities, repairs and maintenance, supplies, advertising, attorney fees, accounting fees, and lawn maintenance. Operating expenses do not include loan payments, mortgage insurance payments, or capital improvements.
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Expense ratio Expense ratio. Posted in: Financial statement analysis/Accounting ratios analysis. Expense ratio (expense to sales ratio) is computed to show the relationship between an individual expense or group of expenses and sales. It is computed by dividing a particular expense or group of expenses by net sales.Expense ratio is expressed in percentage.xpense ratio (expense to sales ratio) is computed to show the relationship between an individual expense or group of expenses and sales. It is computed by dividing a particular expense or group of expenses by net sales. Expense ratio is expressed in percentage.
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What is the 'Expense Ratio' What is the 'Expense Ratio'. The expense ratio is a measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual calculation, where a fund's operating expenses are divided by the average dollar value of its assets under management (AUM).
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- Definition of 'Expense Ratio'. Definition: Expense ratio is the fee charged by the investment company to manage the funds of investors. Description: All the investment companies incur cost for operating mutual funds and they charge a percentage of asset funds to cover the expenses.
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Definition expense ratio. The percentage of premium used to pay all the costs of acquiring, writing, and servicing insurance and reinsurance. There are two methodologies to measure the expense ratio; a trade basis, which is expense divided by written premium and on a statutory basis when the expense is divided by earned premium. Most typically, the ratio is calculated using written premium.
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expense ratio Expense ratio. An expense ratio is the percentage of a mutual fund's or variable annuity's total assets deducted to cover operating and management expenses. Those expenses include employee salaries, custodial and transfer fees, distribution, marketing, and other costs of offering the fund or contract.
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- DEFINITION of 'Cost Control'. The practice of managing and/or reducing business expenses. Cost controls starts by the businesses identifying what their costs are and evaluate whether those costs are reasonable and affordable.Then, if necessary, they can look for ways to cut costs through methods such as cutting back, moving to a less expensive plan or changing service providers.The cost-control process seeks to manage expenses ranging from phone, internet and utility bills to employee payroll and outside professional services.hen, if necessary, they can look for ways to cut costs through methods such as cutting back, moving to a less expensive plan or changing service providers. The cost-control process seeks to manage expenses ranging from phone, internet and utility bills to employee payroll and outside professional services.
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- How to Calculate the OER. An operating expense ratio describes a property’s operating expense compared to the income it generates. How To Value A Real Estate Investment Property. Two common methods for real estate valuation are the discounted net operating income and gross income multiplier approaches.
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Definition Proportionate relationship of incurred losses to earned premiums expressed as a percentage. If, for example, a firm pays $100,000 of premium for workers compensation insurance in a given year, and its insurer pays and reserves $50,000 in claims, the firm's loss ratio is 50 percent ($50,000 incurred losses/$100,000 earned premiums). Links for IRMI Online Subscribers Only: RF III.A.
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Equivalent annual cost Equivalent annual cost. In finance, the equivalent annual cost (EAC) is the cost per year of owning and operating an asset over its entire lifespan. It is calculated by dividing the NPV of a project by the present value of annuity factor:
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Definition of efficiency gain Definition of efficiency gain. Normally measured by looking at the relationship between cost and earnings. If cost goes down and earnings are flat, or if cost is flat but earnings go up, the company has made gains in efficiency. Print.
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Financial Ratios By assessing a company's use of credit, inventory, and assets, efficiency ratios can help small business owners and managers conduct business better. These ratios can show how quickly the company is collecting money for its credit sales or how many times inventory turns over in a given time period.
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- The cost income ratio, defined by operating expenses divided by operating income, can be used for benchmarking by the bank when reviewing its operational efficiency. Francis (2004) observes that there is an inverse relationship between the cost income ratio and the bank's profitability.