Benefit Cost Ratio - BCR

What is a 'Benefit Cost Ratio - BCR'

A benefit cost ratio (BCR) is a ratio attempting to identify the relationship between the cost and benefits of a proposed project. Benefit cost ratios are most often used in corporate finance to detail the relationship between possible benefits and costs, both quantitative and qualitative, of undertaking new projects or replacing old ones.

BREAKING DOWN 'Benefit Cost Ratio - BCR'

As mentioned, the ratio is used to measure both quantitative and qualitative factors, since sometimes benefits and costs cannot be measured exclusively in financial terms. In cases where at all possible however, qualitative factors should be translated to quantitative terms in order for the results to be easily understandable and tangible.

RELATED TERMS
  1. Accounting Ratio

    A way of expressing the relationship between one accounting result ...
  2. Quantitative Analysis

    A business or financial analysis technique that seeks to understand ...
  3. Current Ratio

    The current ratio is a liquidity ratio measuring a company's ...
  4. Variable Cost Ratio

    Variable costs expressed as a percentage of sales. The variable ...
  5. Combined Ratio

    A measure of profitability used by an insurance company to indicate ...
  6. Quantitative Trading

    Trading strategies based on quantitative analysis which rely ...
Related Articles
  1. Fundamental Analysis

    Understanding Qualitative Analysis

    Qualitative analysis is a general term describing the non-mathematical scrutiny used by investors and managers to make investment and business decisions.
  2. Trading Strategies

    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 Basics

    A Simple Overview Of Quantitative Analysis

    All of the potential highs, lows, and sentiments associated with investing can overshadow the ultimate goal—making money. The “quantitative” approach to investing seeks to pay attention to the ...
  4. Professionals

    Quantitative Analyst: Job Description & Average Salary

    Learn the different job duties of a quantitative analyst and how much money an analyst makes; understand the skills needed to be successful at this career.
  5. Bonds & Fixed Income

    How Quantitative Easing Affects the Labor Market

    The Federal Reserve used quantitative easing to aid economic growth. QE has impacted many areas, including the labor market, but are the effects good?
  6. Stock Analysis

    ICICI Bank Limited and Other Big Movers In Financial on September 14, 2012

    The Nasdaq has climbed 1.1%, the S&P 500 has risen 0.6% and the Dow is up 0.4% on a good day for the market so far. The financial sector is the category of stocks containing firms that provide ...
  7. Stock Analysis

    Expedia and More Big Movers on the Nasdaq on September 21, 2012

    This morning, the Nasdaq has moved little, the S&P 500 has decreased 0.3% and the Dow has been relatively flat. The recent surge in popularity of technological stocks has launched the Nasdaq ...
  8. Stock Analysis

    Range Resources Corp. and Other Big Movers In Oil and Gas Operations

    The market is doing well so far today. The Nasdaq has increased 1%; the S&P 500 is up 0.6%; and the Dow is trading up 0.5%. Outperforming the market overall, the Oil and Gas Operations sector ...
  9. Fundamental Analysis

    Efficiency Ratio

    There are many types of efficiency ratios, but all measure how well a company utilizes its resources to make a profit. Business managers use these ratios to determine how well they are operating ...
  10. Stock Analysis

    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 ...
RELATED FAQS
  1. How do I take qualitative factors into consideration when using fundamental analysis?

    Fundamental analysis is the method of analyzing companies based on factors that affect their intrinsic value. There are two ... Read Answer >>
  2. What information should I look at on a publicly traded company for use in fundamental ...

    Learn what information is important in fundamental analysis of a publicly traded company and how to use it to assess the ... Read Answer >>
  3. How do banks measure the Five Cs of Credit?

    Learn about the five C's of credit and what qualitative and quantitative methods banks use to measure them when evaluating ... Read Answer >>
  4. How do economists measure positive and negative externalities?

    Learn the definition of positive and negative externalities and which methods economists use to measure externalities in ... 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. To what extent should you take a company's liquidity ratio into account before investing ...

    Find out how important it is for an investor to know a company's liquidity ratio before deciding to invest, and why relying ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center