What does the expense ratio measure? (A) Efficiency (B) Growth (C) Profitability (D) Solvency - HSC - SSCE Business Studies - Question 4 - 2013 - Paper 1

The expense ratio is a key financial metric that helps assess management efficiency in controlling operating expenses in relation to revenue. It is calculated as:

$Expense ext{ }Ratio = \frac{Total ext{ }Expenses}{Total ext{ }Revenue}$

A lower expense ratio indicates better efficiency, showing that a company is able to generate more revenue per unit of expense. Therefore, the correct answer is:

(A) Efficiency.