Definition of «utilization ratio»

The utilization ratio is a financial metric that measures how effectively a company uses its assets to generate revenue. It compares the total amount of debt or equity used by a business to generate sales, and provides insight into the efficiency with which resources are being employed. The higher the utilization ratio, the more efficiently a company is using its assets to produce income. A low utilization ratio may indicate that a company has excess capacity or is not fully utilizing its available resources.

Sentences with «utilization ratio»

  • You should focus on keeping your credit utilization ratio low by lowering your spending rather than opening new accounts. (nationalcreditfederation.com)
  • You build your business scores over time, by using small business credit cards responsibly, keeping your credit utilization ratio low, and paying on time every month. (wisebread.com)
  • Experts recommend keeping a credit utilization ratio of less than 30 % to ensure a healthy credit rating. (selflender.com)
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