Business Terms and Jargon Explained

What is Accounting Rate of Return

The accounting rate of return is an accounting ratio that allows comparison of different projects. It is the average profits of a project over the initial capital investment presented as a percentage.

Average profits x 100
initial capital

e.g Capital investment is 200K

Year 1 profit 12K
Year 2 profit 40K
Year 3 profit 20K

Total profit for project is 72K

Average profit is 24K

Accounting rate of return is 24 divided by 200 times 100 is 12%

This can now be compared with other projects.

<- Go Back
Business Terms Home page

Search Jargon and Terms Database

A   B   C   D   E   F   G   H   I   J   K   L   M   N   O   P   Q   R   S   T   U   V   W   X   Y   Z


Search Term   

N218 Civil Court form Committal proceedings Public company or public limited company
Hryvnia Affiliate Marketing Endogenous Convergence
Win win Petition Personal Rights
Goods European Council Factoring
Paradigm shift Sol Obligor
Res gestae Merit Good Confidentiality agreement
Affiliate Vicarious Liability Executrices
Gaap Restraint of trade Naira
BRIC Surge Protector NIDAC
Complaints Commissioner to the Bar Council Memorandum of Understanding Market equilibrium
N316 Civil Court form Digital Signature TANGO
Upskill Asset stripper Paris Convention
Cash Accounting Allowable expenses Spoofing

Term created / updated 2005-11-09 12:34:44

Knowledge is the key to success. That is why we have gone to great lengths to get you these business terms and jargon, and explain them in Plain English. Its very easy to comprehend. Learn to understanding and know your business jargon. This will keep you informed among your peers. Bookmark Your business dictionary.

Copyright © 2004-2022 Scopulus Limited. All rights reserved.