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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › ROI and RI
Hi. If two companies are in the same market but one is older ,the other was created newly (their assets’ book value will differ) the question:
Will the older company have better ROI and RI figures? I mean will being older make more favorable figures? I think for ROI it will, because of the lower value of capital employed. What about RI? Better for older again? (because of interest will be lower because of the asset value again)
Thanks
You are correct for both – the older one will have higher ROI and higher RI (for the reason you state).