The advantage of the basic earning power ratio (BEP)over the return on total assets for judging a company's operating efficiency is that the BEP does not reflect the effects of debt and taxes.

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The basic earning power ratio (BEP) is calculated by dividing earnings before interest and taxes (EBIT) by total assets, which gives an indication of a company's operating efficiency before taking into account the effects of financing decisions (debt) and tax rates. In contrast, the return on total assets (ROA) takes into account the effects of interest expense and taxes, which can distort operating efficiency. Therefore, the BEP is a better measure for comparing the operating efficiency of companies with different levels of debt and tax rates.

The Advantage of the Basic Earning Power Ratio (BEP)over the Return