What does OER mean in ACCOUNTING

Operating Expense Ratio (OER) is a financial indicator which measures the operating expenses of a company relative to its total revenue. It is used to assess and compare the efficiency of a company's operational costs against its competitors in the same industry.

Operating expense ratio is calculated by dividing an organization's total operating expenses by its total revenues over a period of time. The resulting percentage indicates how efficiently a firm manages its operations.

OER helps investors and analysts measure companies' operations performance in light of their operational cost structure, thus providing insight into the efficiency with which their resources are managed. This ratio can also be helpful for investors who need to quickly compare different companies in the same industry.

OER should be used when comparing companies within the same industry, as each industry has different levels of overhead costs that should be taken into account when making an investment decision.

An increasing Operational Expense Ratio signifies that most likely there has been an increase in operating expenses compared to total revenues, indicating there might be problems with managing resources efficiently or controlling operating costs or both.