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English definition of “absorption rate”

absorption rate

noun [C]
 
 
( also overhead absorption rate, also recovery rate) ACCOUNTING the percentage of fixed costs (= costs that are the same each month) that a company pays for with the profits from particular products and services: The car dealership covers most of its fixed operating costs with gross profits from service and parts operations, but this 90% absorption rate is unusual in the industry.
( also real-estate absorption rate) PROPERTY the rate at which homes in a particular area are being sold: An absorption rate of 6 indicates a balanced market, while the current figure for the area of 9.2 shows that it is a buyer's market.
(Definition of absorption rate from the Cambridge Business English Dictionary © Cambridge University Press)
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