The concept of potential power efficiency is introduced as the efficiency of an epicyclic gear train (EGT) measured in any moving reference frame. The conventional efficiency can be computed in a carrier-moving reference frame in which the gear carrier appears relatively fixed. In principle, by attaching the reference frame to an appropriate link, torques can be calculated with respect to each input, output, or (relatively) fixed link in the EGT. Once the power flow direction is obtained from the potential power ratio, the torque ratios are obtained from the potential power efficiencies, the particular expression of the efficiency of the EGT is found in a simple manner. A systematic methodology for the efficiency analysis of one and two degree-of-freedom (DOF) EGTs is described, and 14 ready-to-use efficiency formulas are derived for 2DOF gear pair entities (GPEs). This paper includes also a discussion on the redundancy of the efficiency formulas used for 1DOF GPEs. An incomplete in the efficiency formulas in previous literature, which make them susceptible to wrong application, is brought to light.