Definition of Recycle Ratio

Any energy company measures its profitability in terms of recycle ratio. The profitability depends directly upon recycle ratio, higher the recycle ratio greater would be the profitability.

Explanation

The recycle ratio is deliberate with the help of following formula.

Recycle Ratio = Profit per barrel / Total Cost (discovering and extracting that barrel)

In energy sector, the measure of a company’s production efficiency is based on its finding and development costs. Companies show their recycle ration in their quarterly reports and they use it for company’s promotion.