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7 Cards in this Set
- Front
- Back
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ROI |
Operating income / average investment |
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ROI alternatively |
Margin x turnover Where margin = operating income / sales Where turnover = sales / average operating assests |
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Margin |
Operating income / sales |
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Turnover |
Sales / average operating income |
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ROI drawbacks |
May result in GOAL INCONGURANCE |
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Residual income (RI) |
income - (investment x imputed interest rate) *interest rate: minimum rate on return or cost of attaining capital as well |
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RI drawback |
Shouldn't be used to compare divisions of different sizes |
