Calculate the Gross and Net Recovery Rates for debt collection, asset liquidation, or financial claims.
Enter 0 if there were no costs associated with the recovery.
Please enter valid positive numbers. The outstanding amount must be greater than zero.
Gross Recovery Rate:0.00%
Net Recovery Rate:0.00%
Unrecovered Amount (Loss):$0.00
Cost to Collect Ratio:0.00%
function calculateRecoveryRate() {
// Get DOM elements
var totalInput = document.getElementById("totalOutstanding");
var recoveredInput = document.getElementById("recoveredAmount");
var costsInput = document.getElementById("collectionCosts");
var resultBox = document.getElementById("rr-result");
var errorMsg = document.getElementById("rr-error-msg");
// Get values
var total = parseFloat(totalInput.value);
var recovered = parseFloat(recoveredInput.value);
var costs = parseFloat(costsInput.value);
// Validation
if (isNaN(total) || isNaN(recovered) || total 0) {
costRatio = (costs / recovered) * 100;
}
// Display Results
document.getElementById("grossRateResult").innerHTML = grossRate.toFixed(2) + "%";
document.getElementById("netRateResult").innerHTML = netRate.toFixed(2) + "%";
// Format currency output
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
document.getElementById("lossAmountResult").innerHTML = formatter.format(unrecovered);
document.getElementById("costRatioResult").innerHTML = costRatio.toFixed(2) + "%";
resultBox.style.display = "block";
}
What is Recovery Rate?
The Recovery Rate is a critical financial metric used primarily in credit risk management, debt collection, and bankruptcy proceedings. It measures the extent to which principal and accrued interest on a debt instrument can be recovered after a borrower defaults. In a broader business context, it calculates the percentage of value salvaged from any potential loss.
How to Calculate Recovery Rate
The recovery rate can be calculated on a Gross basis (total money collected) or a Net basis (money collected minus the cost of collection).
1. Gross Recovery Rate Formula
This formula measures the raw efficiency of the collection effort regardless of costs.
Imagine a company has a defaulted loan of $50,000. Through a collection agency, they manage to collect $30,000. The agency charges a 10% commission ($3,000).