What does the cost benefit ratio mean? What does the cost benefit ratio mean?

Cost-to-income ratioCost-to-return indicates the profit obtained per unit cost, reflecting the relationship between cost and profit. It can also be understood as an indicator to calculate the value generated by the investment, generally dividing the profit generated by the investment by the investment cost, and different industries and different projects will have differences in the selected profit index or cost index.

Further Material: Cost-benefit analysis refers to the method of estimating and measuring inputs and outputs on a monetary basis. It is a pre-made planning scheme. in a market economy.

Under these conditions, any economic agent is carrying out economic activities.

, we should consider the gains and losses of specific economic behaviors in terms of economic value, so as to have a scientific estimate of the relationship between input and output as much as possible. The cost-benefit analysis method is a popular approach. The premise of the cost-benefit analysis method is to pursue the maximization of utility.

The main body engaged in economic activities, proceeding from the pursuit of profit maximization, always strives to obtain the maximum profit with the minimum cost. In economic activities, the reason why people want to carry out cost-benefit analysis is to obtain the maximum benefit with the least input. The characteristics of cost-benefit analysis are:

Self-interested, economical, and calculative. Among them, self-interest refers to the inner spirit of this method is the pursuit of maximum benefits, but this pursuit of benefits has a strong self-interest. The starting point and purpose of cost-benefit analysis is to pursue the actor's own interests, which is nothing more than a calculation tool for the actor to obtain his own interests.

The utility pursued by cost-benefit analysis is the actor's own utility, not the utility of others, which is its orientation, that is, self-interest.

The cost-benefit analysis process consists of the following four steps: 1. first clarify the relevant costs and benefits2, then calculate these costs and benefits3, then compare the costs and benefits that arise over the life of the project4, and finally select the project. The cost-benefit analysis method mainly includes the following:

Define and estimate expected costs and benefits from a societal rather than a (federal) perspective. In the calculation of cost benefit, the opportunity cost is used.

Define costs and use incremental costs and benefits instead of sunk costs.

in net income. In the calculation, only the actual economic value is calculated, excluding transfer payments.

It is only when the issue of distribution is discussed that transfer payments are considered. Consumer surpluses must be used when calculating costs and benefits.

Conception; Moreover, the willingness to pay must be estimated, either directly or indirectly.

The cost-to-income ratio is an indicator to calculate the value generated by an investment, which is generally divided by the profit generated by the investment cost.

The cost-income ratio is an indicator to calculate the value generated by the investment, generally dividing the profit generated by the investment by the investment cost, different industries and different projects will have differences in the selected profit index or cost index, for example, the cost-income ratio is a measure of the profitability of the bank.

It is an important indicator that is equal to the bank's operating expenses.

The lower the ratio, the lower the cost of the bank's unit of income, the stronger the bank's ability to obtain revenue.

Extended Materials. 1. What is the ratio of cost to revenue?

The proportion of costs and expenses in operating income is calculated from costs to main business income.

The lower the index, the better the cost control ability of the enterprise, the stronger the profitability of the main business, and the calculation formula is the proportion of cost and expense in operating income = (operating cost + business tax and surcharge.

Selling expenses + administrative expenses + financial expenses.

Operating income. Second, the characteristics of cost and benefit.

1.Self-interest: The inner spirit of this method is the pursuit of efficiency, but the pursuit of efficiency has a strong self-interest.

The starting point and purpose of cost-benefit analysis is to pursue the actor's own interests, which is just a calculation tool for the actor to obtain his own interests, and the utility pursued by the cost-benefit analysis is the actor's own utility rather than the utility of others, which is its direction, that is, macro self-interest.

2.Economy: Since the actor has a self-interested motive, always tries to be in the economic activity.

In order to obtain the maximum benefit with the least investment, so that the economic activities are economical and efficient, and the premise of cost-benefit analysis is to maximize the utility contains the requirements of economy and efficiency.

3.Computational: Actors must calculate their own inputs and outputs to achieve the purpose of self-interest in their economic activities, to achieve economy and efficiency, so the cost-benefit analysis contains a kind of calculation rationality that is within the limits of income, without this kind of careful calculation, it is impossible for economic activities to obtain good results, so the calculation characteristics of cost and benefit are necessary means to achieve economy, and it is also the basic tool to ensure the self-benefiting purpose of actors.

Summary. Cost benefit ratio: An accounting indicator.

The formula is: cost rate of return = profit cost expense.

It indicates the profit obtained per unit cost, reflecting the relationship between cost and profit.

Generally, the higher the cost and return rate, the higher the operational efficiency of the enterprise, and this indicator is high in the high-tech industry. Cost benefit ratio: An accounting indicator.

The formula is: cost rate of return = profit cost expense.

It indicates the profit obtained per unit cost, reflecting the relationship between cost and profit.

Generally, the higher the cost and return rate, the higher the operational efficiency of the enterprise, and this indicator is high in the high-tech industry.

The standard formula for calculating the benefit-cost ratio.

Cost benefit ratio: An accounting indicator. The formula for balance and dryness is:

Cost rate of return = profit cost expense. It shows the profit obtained per unit of old cost, reflecting the relationship between cost and profit. Generally, the higher the cost and return rate, the higher the operational efficiency of the enterprise, and this indicator is high in the high-tech industry.

Cost benefit ratio: An accounting indicator. The formula is:

Cost rate of return = profit cost and cost. It indicates the profit obtained per unit cost, reflecting the relationship between cost and profit. Generally, the higher the cost and return rate, the higher the operational efficiency of the enterprise, and this indicator is high in the high-tech industry.

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The cost-to-income ratio is an indicator to calculate the value generated by the investment, which is generally divided by the profit generated by the investment cost. 2.The cost and return rate of the training program in the example problem = 100 10 = 1000%.

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Until next time. The formula for the IRR criterion.

The formula for calculating the yield of the internal differential is (ci-co)tx(1+firr)-t=0(t=1-n). The calculation process of financial internal rate of return is the process of solving a one-dimensional n-order equation, and only the conventional cash flow can ensure that the equation has a unique solution. ok

The cost-to-profit ratio refers to the ratio of the total profit of the enterprise to the total cost of sales and manufacturing.

The cost-to-profit ratio reflects the amount of profit that can be obtained by an enterprise for each dollar of sales and manufacturing costs in a certain period.

The total cost is equal to the cost of doing business plus business tax and surcharge.

Plus selling expenses plus administrative expenses plus finance expenses.

The cost-to-profit ratio is the ratio of the total profit of the enterprise to the total cost of manufacturing sold.

The cost-to-profit ratio reflects how much profit an enterprise can obtain for each dollar of sales and manufacturing costs in a certain period.

For example, the cost of selling goods is 100 yuan, and the profit obtained is 20 yuan, then the cost profit margin = total profit Total sales and manufacturing cost = 20 100 = 20%.

The cost-to-profit ratio is the ratio of the total profit of the enterprise to the total cost of manufacturing sold.

The cost-to-profit ratio reflects the amount of profit that can be made per dollar of sales and manufacturing costs in a fixed period of time.

For example, if the cost of selling goods is 100 yuan and the profit obtained is 20 yuan, then the cost profit margin imitates the trapped sales = total profit and the total cost of sales and manufacturing = 20 100 = 20%.

The operating cost ratio refers to the operating profit of the enterprise.

The ratio to the cost of operation, the rate of operating lease = operating profit and operating cost 100%.

The operating cost ratio refers to the operating cost as a percentage of operating income.

The proportion of the industry, convenient and the same industry, to determine the direction of improvement.

If the operating cost is 1 million and the operating profit is 300,000, then the operating cost rate = operating profit Operating cost = 300,000 1 million = 30%.