Understanding Return On Investment

Whether a business owner, manager, or investor, you're undoubtedly concerned with achieving maximum profit and maintaining effective management. One way to measure these two standards is by using return on investment (ROI), the most commonly used indicator of company profit and management performance. Knowing the ins and outs of ROI is essential, and while it's easy to understand the importance of this concept, it's not always easy to understand ROI itself. Understanding Return on Investment clarifies and explains all the fundamental elements of this important financial tool, making it one you can use comfortably and successfully. Written by two authorities on the subject, this comprehensive guide explains in detail all major aspects of figuring and analyzing costs versus returns of projects and acquisitions. With charts, graphs, and examples drawn from actual companies, Understanding Return on Investment shows you what the two major components of ROI are, where they originate, and how they should be controlled in your business. It highlights the various forms of ROI, including GMROI (gross margin return on investment) and CMROI (contribution margin return on investment), and how they provide different measures for evaluating investment activities. It covers the DuPont system of financial control, ROI's relationship to return on equity (ROE), solvency ratios, and decentralized management.

Sending an SOS when it comes to ROIs?
Help is on the way . . .
UNDERSTANDING RETURN ON INVESTMENT
Return on investment (ROI) plays a major role in business, but it can be a difficult concept to grasp. Understanding Return on Investment shows you how to better utilize this essential tool by simplifying and clarifying all its important points. This invaluable guide includes information on:
* The effect of ROI on investment and disinvestment decisions
* The various forms of ROI and how they provide different measures for evaluating investment activities
* The relationship of ROI to ROE (return on equity)
* The use of ROI in evaluating investment centers in a decentralized operation
* How ROI is used to evaluate managers
* The use of weighted average cost of capital (WACC) in making investment decisions
If you use ROI, but are confused or unclear about some of its details, you'll definitely profit from Understanding Return on Investment, a complete guide to this all-important performance indicator.