Understanding Return on Investment

Front Cover
Sending an SOS when it comes to ROIs?

Help is on the way . . .


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.

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ROI and the DuPont System of Financial Analysis
Problems with ROI in Segments

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About the author (1996)

GEORGE T. FRIEDLOB is Professor and Institute Auditors Research Foundation Faculty Fellow in the School of Accountancy at Clemson University. He has received numerous academic and professional awards, and is the author and editor of a wide variety of professional publications.

FRANKLIN J. PLEWA, Jr., is Professor of Accounting at Idaho State University. The recipient of honors and awards for both teaching and research, he is the author of many books and articles. He is the coauthor with George T. Friedlob of Keys to Improving Your ROI, Financial and Business Statements, Understanding Income Statements, and Understanding Cash Flow.