Real net output ratio

The Real Net Output Ratio (or Vertical Range of Manufacture) describes in a value chain the fraction of the internal (company specific) production on the total production value of one company. The total production value of a company consists of internal production plus the sum of externally produced goods and services.

$\textstyle Real\,Net\,Output\,Ratio={\frac {internal\,production}{total\,production\,value}}={\frac {internal\,production}{internal\,production\,+\,externally\,produced\,goods\,+\,externally\,produced\,services}}$

A Real Net Output Ratio of 0% relates to a company that does not have an own production and therefore only does trading.

This article is issued from Wikipedia - version of the 10/27/2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.