X-Efficiency
X-efficiency unfortunately does not have much to do with the X-men. In fact, uh...it doesn't have anything to do with them.
X-efficiency describes the gap between how efficient businesses really are and how efficient they should be, in theory (hint: they should be more efficient than they likely are).
Neoclassical economics is a fairytale land where there’s perfect competition, and therefore perfect efficiency in response, no more and no less. But the real world looks different. There’s imperfect competition, which means businesses can be a bit lazy and not be so efficient, while still staying in business and turning a profit.
X-efficiency was a concept introduced by Harvey Leibenstein in 1966, in the era of psychedelics. Maybe psychedelics helped bring neoclassical economics back down to earth.
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Finance: What is Return on Sales (ROS)?3 Views
Finance allah shmoop what is return on sales or r
o s This is your return This is your return
on sale Any questions Oh i see a lot of
hands raised Ok then return on sales are roos is
an investment metric which basically reflects how profitable a company
is that is return here is profits and sales is
well the stuff you sold so return on sales is
a profitability index It speaks to how profitable and given
industry or company runs take wear hauser the paper and
pulp company that kills trees and makes them into paper
in a good year They have five billion dollars in
sales and profits of two hundred fifty million Really low
profit margin business especially when you consider that so many
years are well not good But the google search biz
well it's a bunch of servers and algorithm and not
much else So in a given year on sales of
twenty billion box it'll have returns of something like fifteen
billion pretax The basic notion is that you will see
the term return on a ton of other terms like
return on capital return on assets return on equity and
almost always the return that they're referring to There is
profits or earnings And from that ratio of return on
whatever in this case return on sales Investors can impute
a profit margin just a fraction which then derives the
valuation and or various other metrics Important toe Understanding a 00:01:33.812 --> [endTime] given security investment that's Why we study it
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