Farebox recovery ratio formula for federal funding is defined as:

• A. Ratio = operating expenses / income
• B. Ratio = income / operating expenses
• C. Ratio = number of riders / capacity
• D. Ratio = distance traveled / time

Answer: (B)

Farebox recovery ratio shows how much of operating costs are covered by passenger fare revenue. It is calculated by dividing fare revenue (income from fares) by operating expenses for the same period. This tells you what portion of operating costs are funded directly by riders, with higher values meaning less subsidy is needed. In the federal funding context, this ratio helps gauge reliance on fare income versus subsidies. Using the inverse would misstate the portion of costs covered by fares. The other ideas don’t fit because they either invert the measure or relate to service utilization (riders per capacity) or service performance (distance traveled per time), not financial coverage by fares.