Overhead Ratio

"Overhead": all the stuff companies don't really need. The CEO's fancy office. The CEO's expensive secretary, instead of just using Google Calendar and Expedia. And then there's, well, the CEO. Add it all up. Put it in the numerator. And the overhead is some percentage of revenues. And that number is good, bad, or ugly.

Companies of different sizes have different metrics. A huge company with 20 billion dollars in revs will have more overhead in total than a small company, but will likely have less in overhead as a percentage. Industries are different as well. Tech companies usually have less overhead; highly structured, vertically-oriented companies have more infrastructure, and more overhead. Small companies with minimum filing and legal and compliance and other drags on profitability have overhead that likely comprises a larger percentage of their totals.

Bottom line: profits good; overhead bad.