---
name: manage-the-operating-ratio
description: "Read the operating ratio (expenses ÷ revenue) as the survival headline and decompose it before acting. Reach for this on any profitability question."
---

# Skill: Manage the operating ratio

A point of OR is profit vs loss; this reads and decomposes it.

## Step 1 — Compute the OR
Operating expenses ÷ operating revenue; >100 is a loss (§3 #2).

## Step 2 — Decompose it
Split into the cost buckets driving the ratio.

## Step 3 — Benchmark
Compare to the negative-margin 2024 market context, dated.

## Step 4 — Target the driver
Prescribe to the largest controllable bucket.

## Output
An operating ratio, a cost-bucket decomposition, a benchmark, and the targeted driver.