What is the Return to Cost Ratio (RCR)?
When companies are compared, a size effect gets in the way. Usually, large companies are expected to have larger profit, sales or cash flow figures. The same applies to Sustainable Value figures. We therefore take company size into account when comparing different companies. For this purpose, we use the so-called Return to Cost Ratio (RCR). The Return to Cost Ratio (RCR) compares the Gross Value Added of the company to the return the benchmark would have created with the resources (opportunity costs). A Return to Cost Ratio larger (smaller) than 1 indicates that the company yields more (less) return per unit of resource, i.e. the company uses its bundle of resources more (less) efficiently than the German economy or the EU15 on average. For example, a Return to Cost Ratio of 2 : 1 indicates that a company uses its resources twice as efficiently as the benchmark, a Return to Cost Ratio of 1 : 2 shows that a company uses its bundle of resources only half as efficiently as the benchmark.
