The basic equation is as follows:
`Net run rate = (number of runs scored/number of overs faced) - (number of runs conceded/number of overs bowled)`
A positive net run rate means a team is scoring faster than its opposition overall, while a negative net run rate means a team is scoring slower than the teams it has come up against. A positive NRR is therefore desirable.
NRR is usually employed to rank teams that have finished a series or tournament on the same number of points.
Examples:
In the 2012 Indian Premier League (IPL), Pune Warriors scored 2321 runs off 319.2 overs and conceded 2424 runs off 310 overs. Pune Warriors' NRR is therefore:
(2321/319.333) - (2424/310) = 7.268 - 7.819 = -0.551
If a team is bowled out before completing their full quota of 20 or 50 overs (depending on whether it is a Twenty20 or one day match), that full quota is used in the net run rate calculation. For example, if the team batting first is bowled out for 140 after 35 overs of a 50-over game and the opposition reaches 141 in 32 overs, the NRR calculation for that match goes like this:
(140/50) - (141/32) = 4 - 4.406 = -0.406
Other Example:
New Zealand scores 1066 runs off 223 overs and conceded 974 runs off 238.2 overs. New Zealand's net run rate (NRR) is therefore calculated as follows:
(1066/223) - (974/238.333) = 4.780 - 4.086 = 0.694
Note: 238.2 overs, meaning 238 completed overs and two further balls, was converted to 238.333 for the purposes of calculation.
Hope this helps.