Run Rate Law and Legal Definition

Run rate, as used in business industry refer to evaluation of the current financial performance of a given company and projections for future operations. Run rate takes into consideration both the costs related to the operation of the business and the revenue generated by the business. If the company's revenues do not cover the costs, the run rate is another way of saying how much the company is losing each month.

The use of a run rate also helps in assessing the overall health of stock options issued by the company, and how those stocks will perform in future periods.