Operating Efficiency Formula is the business measure of how effective a company is at converting inputs into outputs. Put simply, the formula measures the ratio of output to input. When assessing operating efficiency within a business, executives and analysts compare the number of products or services created on an individual level, or across an entire organization, with the resources used to create them. The higher the ratio, the more efficient the system of production. A healthy operating efficiency can reveal opportunities for improvement and help a business stay ahead of its competition.