# accounting rate of return

- accounting rate of return

An accounting ratio that expresses the profit of an organization before interest and taxation, usually for a year, as a percentage of the capital employed at the end of the period. Variants of the measure include using profit after interest and taxation, equity capital employed, and the average of opening and closing capital employed for the period. Although ARR can be used to forecast return on an investment project, discounted cash flow measures are acknowledged to be superior for this purpose.
*Big dictionary of business and management.
2014.*

### Look at other dictionaries:

**accounting rate of return** — ➔ return1 * * * accounting rate of return UK US noun [C] (plural accounting rates of return) (ABBREVIATION ARR) ACCOUNTING ► the amount of money you invest in a project divided by the amount of profit you expect to get from it. Accounting rates … Financial and business terms

**accounting rate of return** — ARR An accounting ratio that expresses the profit of an organization before interest and taxation, usually for a year, as a percentage of the capital employed at the end of the period. Variants of the measure include using profit after interest… … Accounting dictionary

**Accounting Rate of Return - ARR** — ARR provides a quick estimate of a project s worth over its useful life. ARR is derived by finding profits before taxes and interest. ARR is an accounting method used for purposes of comparison. The major drawbacks of ARR are that it uses profit… … Investment dictionary

**rate of return** — The annual income earned from the investment of resources in a commercial or economic activity, usually expressed as a percentage of the original investment. In a discounted cash flow appraisal, for example, the rate of return may be expressed as … Accounting dictionary

**required rate of return** — The rate of return, usually expressed as a percentage, that an organization determines is necessary before an investment can be regarded as profitable and therefore justified. In a discounted cash flow appraisal the required rate of return may be … Accounting dictionary

**Rate of return** — In finance, rate of return (ROR), also known as return on investment (ROI), rate of profit or sometimes just return, is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.… … Wikipedia

**rate of return** — Calculated as the (value now minus value at time of purchase) divided by value at time of purchase. For equities ( equity), we often include dividends with the value now. See also: return, annual rate of return. Bloomberg Financial Dictionary * * … Financial and business terms

**Учетный (расчетный) коэффициент окупаемости (ACCOUNTING RATE OF RETURN) ** — Отношение суммы прибыли за период к усредненной стоимости инвестиций, произведенных в течение этого периода Важно, что учетный коэффициент окупаемости оценивается по фактическому доходу, а не по дисконтированным потокам денежных средств … Словарь терминов по управленческому учету

**Internal rate of return** — The internal rate of return (IRR) is a capital budgeting metric used by firms to decide whether they should make investments. It is an indicator of the efficiency or quality of an investment, as opposed to net present value (NPV), which indicates … Wikipedia

**internal rate of return** — ( IRR) A measure of yield that relates the cash flow from each interest payment and the cash flow from the investment s redemption value at maturity to the purchase price of the investment. It is a present value calculation that reflects the time … Financial and business terms