Ratio of [price paid for the end product] to [the cost of raw
materials/extraction].

e.g.. petrol:crude oil or drugs:crops would be so high that people are
willing to kill to gain a monopoly of the highly profitable trade. it is not
as simple as ROI, I think.

Gallagher wrote:

Ratio of [price paid for the end product] to [the cost of raw
materials/extraction].

e.g.. petrol:crude oil or drugs:crops would be so high that people are
willing to kill to gain a monopoly of the highly profitable trade. it is
not as simple as ROI, I think.

Gross Margin?

On Thu, 14 Aug 2008 14:02:59 +0800, "Gallagher"
wrote:

Ratio of [price paid for the end product] to [the cost of raw
materials/extraction].

e.g.. petrol:crude oil or drugs:crops would be so high that people are
willing to kill to gain a monopoly of the highly profitable trade. it is not
as simple as ROI, I think.


Could it be "Gearing" ?

Derek

"Derek Geldard" wrote in message
...
On Thu, 14 Aug 2008 14:02:59 +0800, "Gallagher"
wrote:

Ratio of [price paid for the end product] to [the cost of raw
materials/extraction].

e.g.. petrol:crude oil or drugs:crops would be so high that people are
willing to kill to gain a monopoly of the highly profitable trade. it is
not
as simple as ROI, I think.


Could it be "Gearing" ?

Derek

That is the same as leverage which is usually for housing loans.

Let me give an example to illustrate:

Evian bottled water has a price that includes the premium for its brand,
marketing costs, packaging,etc and when the retail price is compared with
cost of extracting water, the ratio is large enough to justify financing
such a business. The same with Pepsi, where its raw materials namely
sugar,water,etc are cheap but put together and cleverly marketed, the end
product makes this profitable. So what is the ratio (say 70:1) of Price of
Pepsi : {cost of sugar,water,labour,etc} called?

Gradient of average price-cost graph? or something similar to benefit-cost
ratio? can't find the exact formula...