A:

A power ratio is a method used by media companies to measure revenue performance compared to the audience share it controls. In order to use the power ratio, a company must know three numbers: the total market revenue, the company's revenue, and the audience share. The goal for media companies is to receive a high score in this ratio.



A power ratio often is used to compare the performance of different media forms against similar competitors. A high power ratio means that more revenue is received per thousand visitors or participants within a given medium. Power ratios are used both by media firms to evaluate performance and occasionally by large media corporations who seek to buy out smaller media outlets.



This question was answered by Richard C. Wilson.



RELATED FAQS
  1. How do stock dividends affect the retained earnings account?

    Understand the difference between financial ratio analysis and accounting ratio analysis. Learn why ratio analysis is important ... Read Answer >>
  2. How do I use ratios to perform a financial analysis?

    Learn which ratios are used in fundamental analysis. Find out how analysts measure company performance and financial health ... Read Answer >>
  3. How does ratio analysis make it easier to compare different companies?

    Learn what ratio analysis is, how investors can compare companies within the same sector using ratio analysis and how ratios ... Read Answer >>
  4. What role does ratio analysis play in valuing a company?

    Learn about the role of ratio analysis in determining company value, including some of the most common ratios used by modern ... Read Answer >>
  5. How can a company quickly increase its liquidity ratio?

    Discover what high and low values in the liquidity ratio mean and what steps companies can take to improve liquidity ratios ... Read Answer >>
  6. What ratios are most commonly used to judge working capital management?

    Learn about the various working capital ratios that investors and analysts consider when evaluating a company's financial ... Read Answer >>
Related Articles
  1. Investing

    Sysco and Other Big Movers In Services

    The market has been slipping so far today. The Nasdaq has fallen 0.3%; the S&P 500 has fallen 0.4%; and the Dow has declined 0.5%. The Services sector (IYC) is currently lagging behind the overall ...
  2. Investing

    Financial Ratios to Spot Companies Headed for Bankruptcy

    Obtain information about specific financial ratios investors should monitor to get early warnings about companies potentially headed for bankruptcy.
  3. Investing

    Biggest Financial Sector Movers for July 24, 2012, Including NSM

    This morning's trading has marked a bad day for the market so far. The Nasdaq has declined 0.2%; the S&P 500 is trading down 0.5%; and the Dow has fallen 0.6%. The financial sector is the category ...
  4. Investing

    SXC Health Solutions Corp. (USA) Among the Nasdaq's Biggest Movers

    The market is having a bad day so far: the Nasdaq is trading down 0.3%; the S&P 500 has declined 0.4%; and the Dow has slipped 0.5%. The Nasdaq Composite Index is a capitalization-weighted index, ...
  5. Small Business

    Why Is Old Media Interested in New Media?

    With their eye-popping valuations and investments, new media startups are hot. But why are legacy media organizations interested in them?
  6. Investing

    Biggest Real Estate Operations Sector Movers for July 3, 2012

    The market is on the rise this morning. The Nasdaq has climbed 0.7%; the S&P 500 has increased 0.7%; and the Dow is trading up 0.6%. Underperforming the market overall, the Real Estate Operations ...
  7. Small Business

    Social Media: High Risk, High Potential Returns

    Carefully selecting social media ETFs can provide you with the opportunity to diversify your portfolio and enjoy financial rewards due to user growth.
  8. Investing

    ASML Holding N.V and Other Big Movers In Semiconductors on August 28, 2012

    The Nasdaq has fallen 0.1%, the S&P 500 is down 0.1% and the Dow has declined 0.1%, marking a bad morning for the market. The Semiconductors sector (XLK) is down 0.2%, underperforming the market ...
  9. Investing

    Wal-Mart's 5 Key Financial Ratios (WMT)

    Identify the five key financial ratios that fundamental analysts use to evaluate Wal-Mart's financial position and determine if its stock is a good buy.
RELATED TERMS
  1. Current Ratio

    The current ratio is a liquidity ratio measuring a company's ...
  2. Ratio Analysis

    A ratio analysis is a quantitative analysis of information contained ...
  3. Key Ratio

    A mathematical ratio that illustrates and summarizes the current ...
  4. Combined Ratio

    A measure of profitability used by an insurance company to indicate ...
  5. Efficiency Ratio

    Ratios that are typically used to analyze how well a company ...
  6. Activity Ratios

    Accounting ratios that measure a firm's ability to convert different ...
Hot Definitions
  1. Derivative

    A security with a price that is dependent upon or derived from one or more underlying assets.
  2. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  3. Sharpe Ratio

    The Sharpe Ratio is a measure for calculating risk-adjusted return, and this ratio has become the industry standard for such ...
  4. Death Taxes

    Taxes imposed by the federal and/or state government on someone's estate upon their death. These taxes are levied on the ...
  5. Retained Earnings

    Retained earnings is the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested ...
  6. Demand Elasticity

    In economics, the demand elasticity refers to how sensitive the demand for a good is to changes in other economic variables. ...
Trading Center