Overhead Ratio Calculator

How it is calculated

The tool divides running costs by total operating income: overhead ratio = opex / (revenue + other income) × 100. opex is operating expenses for the period, revenue is sales or main income, and other income is any additional operating income; if you leave it empty it counts as 0. All amounts must be in the same currency and covering the same period. Opex and other income cannot be negative, and revenue plus other income must be above zero, otherwise there is no result. The answer is a percentage with two decimals. A lower figure means less income is eaten by overhead. The tool does not tell you which costs belong in operating expenses; deciding that, for example whether depreciation is included, is your responsibility.

Common mistakes

• Including cost of goods sold or interest in opex when the ratio you compare against excludes them. Use the same definition as the benchmark.
• Dividing by revenue only and forgetting other operating income, which gives a higher ratio than this formula.
• Mixing periods, for instance full-year opex with a single quarter of revenue.
• Entering the cost as a negative number because it is shown in brackets in the accounts. Negative values are rejected.
• Comparing a bank ratio with a retailer's. Banks use non-interest expense over total income, and normal ranges differ widely by sector.