The opex ratio your accountant will not show you
Absolute operating expense always rises. The number that matters is what it costs you per ringgit of revenue.
Every management account shows operating expense in ringgit. Almost none show it as a share of revenue, which is the only version that tells you whether the business is getting more efficient or less.
Opex rising 8 percent sounds bad. Against revenue rising 16 percent it is the opposite: the business just bought two points of net margin.
Track the ratio, not the total
Divide each opex category by revenue for the same period and plot it monthly. Categories that climb while revenue climbs are the ones quietly eating the gains.
Want your own split? Upload twelve months of P&L and we will return the price, volume and mix decomposition, free.
Get my analysis
