Key ratio analysis
Capital Works Management Framework, Guidance Note, Glossary, Published by the Government of Ireland Department of Finance in 2009 suggests that:
‘Key ratio analysis is a technique that can help identify cost-efficient solutions. The output from key ratio analysis needs to be balanced with other factors such as quality and functionality in determining the final solution. The review of key ratio analysis against benchmark data can greatly assist in understanding the distribution of costs and the efficiency of the project.
An example of a key ratio analysis in the building context would involve obtaining the net to gross floor area ratio in order to assess the proportion of circulation required, which could then be compared to sector norms.
An engineering example might involve looking at the cut and fill ratio required and thus determine the cost effectiveness of a particular solution.’
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