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?

no i dont think it is called 'Gross Margin' as far as i know The Gross
Margin is gross cost of goods sold plus alteration room and workroom
net cost, if any, less each discount earned on purchases.
Vik




-- 
finvik

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
news:thkia414mlngbsnuro3pe0djqueisuj6ob@4ax.com...
> 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...