How to Find the Total Expense Ratio on a Balance Sheet

Video Transcript

"Hi, I'm Ryan Levine and I'd like to talk about how to calculate the total expense ratio using the balance sheet. Typically, the total expense ratio gives an investor insight or understanding as to how much they're paying for their ownership within a mutual fund or a given company. As an investor is looking for an ultimate return on his investment, often times it's also expected that he's going to have to pay a fee to those who are managing the funds or managing his ownership within a specific set of shares. And of course it obviously becomes a value for that investor to understand exactly what he's paying and understand what the total expense is. The total expense ratio can be calculated simply by taking the total fund's cost and dividing it by the total fund's assets. The total fund's cost can be understood by what the investor is paying in fees to a broker or to a manager of funds. And then the total fund's assets can be taken directly from the balance sheet, from a total set of funds and help the investor understand exactly how many assets are being managed. This ratio then helps understand the total cost that's being paid to manage these funds. For further additional questions, contact us utworkingcapital@gmail.com."