Expense ratio

• Overall


  Rising expenses after profits. Rising expense rates could indicate a concern. See which cost centres are increasing their expenses at a higher rate

  Can be worked out for each area of expenses or for total expenses

  Increasing ratios are not necessarily a problem as a business may plan for example to increase its marketing budget

  Rising expense ratios may call for greater levels of control
• Strategies


  lower these expenses will add efficiency and profitability of a business. Carefully monitoring the various cost centres will highlight problem areas. It is important to realise that indiscriminate cost cutting can affect the competitive situation of a business and lead to extreme problems