RUN RATE

RUN RATE

Subject : Economy

Context : Indian Oil Corporation had reduced its refinery run rate to 88 per cent, while privatisation-bound Bharat Petroleum Corporation Ltd cut its run rate to 85 per cent of its refining capacity. Run rate is the proportion of crude processed by a refinery relative to its total processing capacity.

Concept :

• Run rate is the financial performance of a company, using current financial information as a predictor of future performance.
• The run rate assumes that current conditions will continue.
• Run rates are helpful in formulating performance estimates for companies that have been operating for short periods of time.
• Run rate may also refer to the average annual dilution from company stock option grants over the most recent three-year period recorded in the annual report.