ICOR Figures And Corollary

wealthymattersIncremental Capital Output Ratio (ICOR) is the additional capital required to increase one unit of output. This ratio is used to measure the efficiency of an industrial unit or country as an economic unit. The lesser the ICOR, more efficient the organization.

India’s ICOR has more than doubled in the last year,meaning we are now half as efficient as before in the use of our capital.

In 2011-12,we needed to invest 5.4 Rupees to make 1 rupee,i.e we were getting an average 18.5% returns on our money invested in businesses.In 2012-2013,the returns fell to 8.7%.

So what sort of returns do you make on money invested in  business?Is it above or below the national average? If you feel business is slower or that its increasingly difficult to turn out a decent profit.you are not alone…….

If this is the sort of returns promoters on an average can make on money,guess what investors , especially retail investors are likely to receive….. Read more of this post

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