CIR (Cost-income ratio)

CIR (Cost/Income Ratio) - is a metric that reflects business operational efficiency. It is calculated as the ratio of operating expenses to operating income. The lower the CIR, the higher the efficiency. 
How to calculate CIR:
CIR = (Total Costs / Total Revenue). 
Example:
If a company's total costs are 100,000 USD and total revenue is 200,000 USD, then CIR = 100,000 / 200,000 = 0.5. This means that for every 50 USD in costs, the company generates 100 USD in revenue, which is a good result. 
Why this is an important metric
By analyzing CIR, you can determine how efficiently a company spends its resources on acquiring and servicing customers. 
The optimal CIR in online business is a metric that reflects the efficiency of resource utilization. Striving to reduce CIR is a key factor in increasing profitability and ensuring sustainable business growth. 
For a successful online business, the CIR should be below 1, for example, 0.75, which means that for every 0.75 USD in costs, there is 1 USD in revenue. 
How to improve CIR:
Reducing Costs
Optimizing marketing campaigns to attract more customers at a lower cost.
Improving the efficiency of operational processes to reduce customer service expenses.
Automating processes to minimize manual labor and lower costs.
Increasing Revenue
Increasing the average order value by offering additional products or services.
Improving website conversion rates so that more visitors become buyers.
Enhancing customer loyalty to encourage repeat purchases.