# Efficiency Ratio Calculator

Written by:
PK

On this page is a bank efficiency ratio calculator. Enter the bank's non-interest expenses and total top-line revenue (or optionally, revenue net of loan-loss provisions) to compute its efficiency ratio.

## What is the efficiency ratio?

A bank's efficiency ratio is an at-a-glance measure which shows you how a bank is converting its non-investment costs into total revenue. Ideally, this number should be as low as possible, which would mean a bank is generating much more in revenue than its non-investment input costs.

### Efficiency Ratio Formula

The efficiency ratio formula is:

efficiency\ ratio=\frac{non-interest\ expenses}{revenue}

Where:

• Non-Interest Income – Non-interest or non-investment revenue reported by the bank.
• Revenue – The top-line revenue of the company, or more accurately use the revenue net of any provisions for loan losses.

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### PK

PK started DQYDJ in 2009 to research and discuss finance and investing and help answer financial questions. He's expanded DQYDJ to build visualizations, calculators, and interactive tools.

PK is in his mid-30s and works and lives in the Bay Area with his wife, two kids, and dog.

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