From Longman Business Dictionaryexpense ratioexˈpense ˌratio1ACCOUNTING the costs of operating a company shown as a percentage of salesK-mart’s expense ratio is 23% for its discount stores, compared with only 15% for Wal-Mart’s discount stores.2FINANCE the costs of operating an INVESTMENT FUND shown as a percentage of the amount the fund earns from its investmentsThis imaginary fund owns bonds yielding 10% but the fund also has a 1% annual expense ratio; the portfolio is only returning 9% after expenses.3INSURANCE the costs of operating an insurance company shown as a percentage of the money it receives from people paying for insurance policiesEquitable is one of the lowest cost operators in the industry, with an expense ratio — expenses to premiums — of 4.3%. → ratio
