20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

divisional performance

This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.

Viewing 2 posts - 1 through 2 (of 2 total)

Author
Posts
June 28, 2017 at 7:19 am #394242
adarsh1997
Participant
- Topics: 646
- Replies: 282
Hi John!
From you lectures and notes, I do have understood the overall concept of ROI but still has some issues.
Could you explain, how the ROI will increase year by year if the investment centre keeps the same asset without a policy of regular replacement,that is, continue to depreciate it’s NCA?
June 28, 2017 at 8:13 am #394246
John Moffat
Keymaster
- Topics: 57
- Replies: 54701
Because as they depreciate the value of the asset (and therefore the total net assets) will reduce.
If the profit stays the same, but you are dividing by a lower amount, then the ROI will increase.
Author
Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.