What is the performance ratio?
performance ratio is a business ratio used by media companies, such as television or radio stations, to the company's benchmark performance in terms of income. The greater the performance of the company's performance, the greater the ability of the company to generate revenue compared to the percentage of the audience market. The company management uses performance ratios to monitor and report trends in sale, compare the operation of the company with other companies in the same place and to assess the company for potential purchase. In order to calculate the performance ratio, the company must first determine its share of the audience, the percentage of viewers, listeners or users who tune in or who use the services of this company. Once the audience sharing is known, managers compare the income of the company with a total market income to determine whether the company generates the expected amount of income, due to its share of the audience. It would expect its share of the audience. Power ratio above 1.0 means that the company produces revenue ona level that exceeds expectations. For example, a 1.5 -rate company generates 50 percent more income than expected on the basis of its market share. Power ratio below 1.0 lagging signal sales and potential of bland income.
Media companies calculate the ratio of performance by distributing income by the product of the audience's share and total market income. For example, WLST radio station determines that it attracts 30 percent of rock music listeners. The WLST income in the last quarter was $ 400,000 USD (USD), with a total market income for a rock venue of $ 1 million. In accordance with the performance ratio, the company multiplies the share of the audience according to market income, which brings a value of $ 300,000. Division of $ 400,000 USD income by $ 300,000 provides an output ratio of 1.33.
marketing research companies create a performance ratio and reports underAle on the market for whole formats throughout the industry. These reports indicate the relative power of individual market segments. Research companies can calculate the sharing of the audience through surveys, diaries and polls. Companies also collect data electronically and through software programs. One company that monitors television audiences around the world is AGB Nielsen Media Research, which uses a microphone to pick up barely audible, built -in tones to watch TV watching.