Omzettocosts

Omzettocosts is a financial metric used in business analysis to express the relationship between a company's revenue (omzet) and its costs. In its common form, Omzettocosts is calculated as Revenue divided by Total Costs, yielding a ratio that indicates how much revenue is generated for each unit of cost. Some practitioners also describe it as the omzet-to-costs ratio.

Origin and usage: The term blends the Dutch word omzet (turnover or revenue) with costs, and is more common in informal or internal reporting, particularly in organizations with Dutch influence or bilingual teams. It is not a standard, universally defined metric in international accounting, and its exact definition may vary between companies.

Interpretation: A higher Omzettocosts ratio implies greater revenue efficiency relative to costs, while a lower ratio signals higher cost intensity for each revenue unit. The metric is sensitive to revenue recognition and cost allocation, and it does not reflect gross or net profit. It should be interpreted alongside margins and cash flow.

Example: If a company reports omzet of 1,200,000 and total costs of 900,000, Omzettocosts = 1,200,000 / 900,000 ≈ 1.33. This suggests 1.33 dollars of revenue per dollar of cost, but it does not indicate profitability. In some practices, the inverse ratio (Costs / Revenue) is used, e.g., 0.75.

Relation to other metrics: Omzettocosts relates to cost-to-revenue analysis and can complement profitability metrics such as gross margin, operating margin, and net margin. Limitations include sensitivity to non-operating items and differences in cost allocation; it is best used with other metrics to assess overall financial performance.