Operating Ratios Commonly Used By Accountants

The operating ratio, also known as the dynamic ratio, is proportional to the utilization of resources. They reflect the efficiency of enterprise operation and the full utilization of all kinds of resources.

Several common operating ratios

Commonly used are the following:

1. market share.

Also known as market share refers to the proportion of the main products of the enterprise in the total sales volume of the product. For large companies, this is the most important business ratio and the goal that should be fought and defended. Because only by achieving a stable market share can enterprises win in the fierce market competition and gain substantial profits. The decline of market share is the most striking feature of an enterprise's decline. It is noteworthy that the decline in market share may be obscured by slow growth in sales. For example, when a company's middle age sales increase by 5% in a market with a growth rate of 1%, it still shows that its market share is declining.

2. relative market share.

When there is no statistical data of total market size, market share can be used as an indicator. There are two commonly used indicators of relative market share: one is the percentage of the total sales volume of a company and the largest three competitors in the company's market, and the other is the percentage of sales with the largest company.

3. input to output ratio.

The input output ratio as a control measure is a direct measurement standard for input and utilization efficiency. Some of these ratios are based on physical units of measurement. The following are some common measurement standards between input and output.

(1) investment.

A, wages and bonuses;

B, practical working hours;

C, production capacity;

D, main raw materials;

E, energy, and so on.

(2) output.

A, product output;

B, sales volume;

C, sales revenue;

E, total industrial value, and so on.

Almost every item Investment Can produce the same output. whatever One corresponds to a ratio. measure The effectiveness or efficiency of the operation or management of one side. For example, the total industrial output value is higher than the total working hours (or the total number of working days (or days) labor productivity; the ratio of energy consumption to industrial gross output value is the energy consumption rate of output value.