Dictionary:

pro rata

  (prō rā'tə, rä'-, răt'ə)

In proportion, according to a factor that can be calculated exactly.

[Latin prō ratā (parte), according to the calculated (share) : prō, according to + ratā, feminine ablative of ratus, calculated.]

Used to describe a proportionate allocation. A method of assigning an amount to a fraction, according to its share of the whole.

Investopedia Says:
For example, a pro-rata dividend means that every shareholder gets an equal proportion for each share he or she owns. Pro-rating also refers to the practice of applying interest rates to different time frames. If the interest rate was 12% per annum, you could pro-rate this number to be 1% a month (12%/12 months).

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An equal amount, according to the fraction held by each.
Example: A owns 40%, B owns 30%, C owns 20%, and D owns 10%. A $100 pro rata distribution is paid to the owners: A received $40, B received $30, C received $20, D received $10.

Basis for allocating an amount proportionately to the items involved. An amount may be proportionately distributed to assets, expenses, funds, and so forth. For example, at year end, underapplied overhead may be allocated to work-in-process, finished goods, and cost of sales based on the dollars or units applicable to those accounts. Assume underapplied overhead is $1000, work-in-process is $4000, finished goods is $5000, and cost of sales is $1000. The pro rata charge to work-in-process, for instance, would be $400 ($4000/$10,000 x $1000). The journal entry is:

Work-in-process 400

Finished goods 500

Cost of sales 100

Factory overhead 1000

[Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share.

In a bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. If the debtor has any remaining funds, the money is divided proportionately among the creditors, according to the amount of the individual debts.

A pro rata clause in an automobile insurance policy provides that when an insured person has other insurance policies covering the same type of risk, the company issuing the policy with the pro rata clause will be liable only for a proportion of the loss represented by the ratio between its policy limit and the total limits of all the available insurance.

Proportionally