Meaning of “absorption rate” in the English Dictionary

business-english dictionary

"absorption rate" in Business English

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absorption ratenoun [ C ]

uk us

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)