Question

“Return on investment is considered to be the master ratio which reflects the overall
performance of the firm” Elucidate.

Answer 1

Answer:

Explanation:

Return on investment is considered to be the master ratio which reflects the overall  performance of the firm.

Return on Investment (ROI) is also referred to as return on capital employed. It is a ration that measures  how effectively a firm can use its assets to generate profits.

ROI is calculated by dividing the return by the cost of the investment.

A high ROI means that the firm is doing well while a low ROI means that the firm is doing poorly.