Chapter 8 Return on Invested Capital and Profitability Analysis

Return on Invested Capital

Importance of Joint Analysis
1. Joint analysis is where one measure is assessed relative to another

2. Return on invested capital (ROIC) or Return on Investment (ROI) is an important joint analysis

3.ROI relates income, or other performance measure, to a company’s level and source of financing.
4.ROI allows comparisons with alternative investment opportunities
5.Riskier investments expected to yield a higher ROI
6.ROI impacts a company’s ability to succeed, attract financing,repay creditors,and reward owners.

Silahkan klik disini for detail