Real net output ratio

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The Real Net Output Ratio^[1] (or Vertical Range of Manufacture^[2]) 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.

${\displaystyle \textstyle Real\,Net\,Output\,Ratio={\frac {internal\,production}{total\,production\,value}}={\frac {internal\,production}{internal\,production\,+\,externally\,produced\,goods\,+\,externally\,produced\,services}}}$

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

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