Return on Investment

1. Investor’s View
Ratio: Net Income as a percentage of the Shareholders’ Equity.

ROI measures how effectively the Shareholders’ investment has been put to work to create profit. Also known as Return On Equity (ROE).

2. Manager’s View
The benefit obtained from any internal improvement or expansion, expressed as a percentage of the cost. This ROI forecast allows the Finance Department to choose between competing proposals for improving the business, by seeing which ones provide the biggest bang for the buck.

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