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- DictionaryEn·er·gy ef·fi·cien·cy ra·ti·o
noun
- 1. the ratio of a heating or cooling system's output, per hour, in British thermal units to the input in watts, used to measure the system's efficiency.
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noun
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Indicator of expenses as a percentage of revenue; i.e. how many euros one spends to make a euro
The efficiency ratio indicates the expenses as a percentage of revenue, with a few variations – it is essentially how much a corporation or individual spends to make a dollar; entities are supposed to attempt minimizing efficiency ratios. The concept typically applies to banks. It relates to operating leverage, which measures the ratio between fixed costs and variable costs. Wikipedia