What does a Two-Year Overall Operating Ratio below 100% signify?

A Two-Year Overall Operating Ratio below 100% signifies that the company is generating an operating profit. The operating ratio is a financial metric used to assess the efficiency of a company's management by comparing operating expenses to net sales. When this ratio is below 100%, it indicates that the expenses incurred in operations are less than the revenue generated from those operations, thereby resulting in a profit. This is a positive indicator for the organization's financial health, showing that it is able to cover its operational costs while still earning a profit from its activities. In contrast, a ratio above 100% would indicate an operating loss, demonstrating that expenses exceed revenues.