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EXAMPLE If expenses are $40 and revenue is $80 (perhaps net of interest revenue/expense) the efficiency ratio is 0.5 or 50% (40/80), the operating leverage is 2.0 or 200%. Citigroup Citigroup, Inc. 2003:
That makes operating expenses / revenue = 39,168/77,442 = 0.51 or 51%. The efficiency ratio is 0.51 or 51%. Or the other way revenue / expenses 77,442/39,168 = 1.98. The " Operating Leverage " is 198%. Alternative If "benefits, claims, and credit losses" is added to operating expenses the ratio get worse. 51109/77,442=0.66 Alternative If it's calculated as revenue divided by expenses (interest expense, "benefits, claims, and credit losses", operating expenses) it becomes 1 less the "income from continuing operations" margin. 68,380/94,713=0.72 SEE ALSO EXTERNAL LINKS
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