“Return on Investment is a single comprehensive measure that contains everything happening within the organisation” Explain the statement and illustrate its computations with imaginary figures.
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Return on investment is a computation that is used to measure the value of a company's profitability and the efficiency of its investments. ROI is calculated as follows:
Net profit/cost of investment x 100%
If santos invested Rs 100 in a given company and he got Rs.120 in return, then return on investment would be:
The net profit = 120 - 100 = Rs. 20
ROI = net profit/investment value x 100%
=20/100 x 100%
= 20%
Net profit/cost of investment x 100%
If santos invested Rs 100 in a given company and he got Rs.120 in return, then return on investment would be:
The net profit = 120 - 100 = Rs. 20
ROI = net profit/investment value x 100%
=20/100 x 100%
= 20%
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