hyötykustannussuhteen

Hyötykustannussuhde, often abbreviated as HKS, is a financial ratio used to evaluate the profitability of an investment or a project. It is calculated by dividing the net present value (NPV) of the expected benefits by the net present value of the expected costs. The formula for HKS is:

HKS = (NPV of benefits) / (NPV of costs)

The ratio indicates the amount of benefit received for each unit of cost incurred. An HKS greater than 1 suggests that the benefits outweigh the costs, indicating a potentially profitable investment. Conversely, an HKS less than 1 suggests that the costs outweigh the benefits, indicating a potentially unprofitable investment.

HKS is commonly used in cost-benefit analysis to compare different investment options and to make informed decisions. It is particularly useful when comparing projects with different lifespans or cash flows that occur at different times, as it discounts future costs and benefits to their present value.

However, HKS has its limitations. It does not account for risk or uncertainty, and it assumes that all costs and benefits can be accurately quantified and discounted. Additionally, HKS does not provide information about the distribution of benefits and costs over time.

In summary, hyötykustannussuhde is a valuable tool for evaluating the profitability of investments, but it should be used in conjunction with other analytical methods to make well-rounded decisions.