kostnadstäckningen

Kostnadstäckningen, or cost recovery, is an economic principle that refers to the extent to which revenue generated by a business or service covers its associated costs. In essence, it measures how much of the expenses incurred are recouped through sales or fees. A complete cost coverage means that all costs, both direct and indirect, have been paid for by the income generated.

There are different levels of cost coverage. Full cost coverage ensures that all variable and fixed costs are met. Partial cost coverage, on the other hand, indicates that only a portion of the total costs are recovered, often covering variable costs but not all fixed costs. This situation might be acceptable in certain strategic scenarios, such as market entry or during periods of low demand.

The concept of cost coverage is crucial for financial analysis and decision-making. It helps businesses understand their profitability and sustainability. A consistent failure to achieve adequate cost coverage can lead to financial losses and, in the long term, business failure. Public services and utilities often operate with a mandate for cost coverage, aiming to recover operational expenses through user fees or tariffs, though this may be supplemented by public funding to ensure affordability or accessibility. Analyzing cost coverage is a fundamental aspect of financial management and performance evaluation.