Real net output ratio

The Real Net Output Ratio (or Vertical Range of Manufacture) describes in a value chain the fraction of the internal (company specific) production on the total production value of one company. The total production value of a company consists of internal production plus the sum of externally produced goods and services.

R e a l N e t O u t p u t R a t i o = i n t e r n a l p r o d u c t i o n t o t a l p r o d u c t i o n v a l u e = i n t e r n a l p r o d u c t i o n i n t e r n a l p r o d u c t i o n + e x t e r n a l l y p r o d u c e d g o o d s + e x t e r n a l l y p r o d u c e d s e r v i c e s

A Real Net Output Ratio of 0% relates to a company that does not have an own production and therefore only does trading.