What formula can be used to assess efficiency ratio?

• A. Output energy divided by total input energy
• B. Expenses divided by revenue
• C. Revenue minus expenses
• D. Useful output energy divided by useful input energy

Answer: (D)

Efficiency ratio measures how effectively a system converts input resources into useful output. By using useful output energy divided by useful input energy, you’re comparing what actually surfaces as the desired result to what actually enters the system to produce that result, which shows how well losses are being managed. This focuses on the portion of energy that serves the intended task, rather than mixing in energy that isn’t contributing to the goal. The other options either mix in financial metrics or use total input energy instead of the portion actually used for the process, which can obscure true efficiency. So the proper formula is useful output energy divided by useful input energy.