Show the merits of using return on investment, Strategic Management

Q. Show the Merits of using return on investment?

Merits of using return on investment (ROI)

-  Relative (percentage) measure so performance can be compared 'relatively' for divisions or business units which are different sizes.

-  ROCE is a well understood measure for 'users' of financial accounting.

-  Forces a manager to be efficient and effective with resources e.g. money or capital employed to buy assets, when attempting to improve profitability.

Posted Date: 8/9/2013 1:44:18 AM | Location : United States

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