Utilization Rate
Content
Definition
In finance, the Utilization Rate is the ratio of funds borrowed by a corporation to the total available funds under a revolving credit line or loan facility.
Usage and Context
The utilization rate is the ratio of borrowed funds to total available funds under a revolving credit line.
Frequently asked questions
- What is the utilization rate ratio? The utilization rate ratio measures how much of the available resources are used, indicating operational efficiency.
- What is utilization in resource management? Utilization in resource management measures how effectively resources are used to achieve business goals.
- What is utilization in finance? Utilization in finance means how much a company uses its available financial resources, like credit lines or assets, to generate revenue.
Benefits
The utilization rate shows borrowing efficiency, guiding financial management under credit lines.
Conclusion
The utilization rate measures borrowing efficiency, aiding in financial management.
