In the fast-moving landscape of Australian business, understanding your company’s financial health is more than just balancing the books. One metric that’s gaining traction in 2025 is the operating ratio—often referred to as OPEX. Whether you’re steering a growing SME or managing an established corporation, mastering this figure can mean the difference between sustainable growth and a cash flow crunch.
The operating ratio (OPEX) is a simple but powerful metric that measures how efficiently a business turns revenue into operating profit. Expressed as a percentage, it’s calculated by dividing operating expenses by net sales:
For Australian businesses, a lower operating ratio signals greater efficiency—more of every dollar earned is retained as profit, rather than eaten up by costs. In 2025, this ratio is under sharper focus due to mounting pressures: rising wage costs, ongoing supply chain challenges, and stricter ESG (environmental, social, governance) requirements that can increase compliance spend.
Example: If your business has $2 million in net sales and $1.2 million in operating expenses, your OPEX ratio is 60%. That means 60 cents of every dollar earned goes toward keeping the lights on, paying staff, and running day-to-day operations.
This year, the Albanese government has introduced several key changes affecting business operating costs:
These policy shifts mean that keeping a close eye on your OPEX is more critical than ever. A sudden spike in your operating ratio could signal it’s time to revisit supplier contracts, automate repetitive tasks, or take advantage of government support for tech upgrades.
How do you know if your OPEX is healthy? Industry benchmarks are a good starting point. For example, in 2025:
To improve your operating ratio, consider these proven strategies:
Real-world example: Sydney-based café group ‘BeanScene’ trimmed its OPEX ratio from 78% to 67% in 2025 by switching to solar panels (with state rebates), renegotiating its milk supplier contract, and implementing an AI-driven rostering system.
In today’s climate, the operating ratio is more than just an accounting metric—it’s a pulse check for business resilience. With the Australian economy navigating post-pandemic recovery, inflationary pressures, and technology-driven disruption, businesses that monitor and manage their OPEX are better equipped to seize new opportunities and weather unexpected storms.
Put simply: if you’re not tracking your operating ratio, you’re missing a vital signal about your business’s financial health and competitiveness in 2025.