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Divisional Performance Measurement

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Divisional Performance Measurement

  • This topic has 3 replies, 2 voices, and was last updated 10 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
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  • November 14, 2014 at 4:09 pm #210016
    mambo.emma
    Member
    • Topics: 4
    • Replies: 6
    • ☆

    Hello tutor when you are given both gross profit and net profit which one of them should I use to calculate ROI? and please provide an explanation as to why it is so. Thanks

    November 15, 2014 at 11:36 am #210169
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54758
    • ☆☆☆☆☆

    You should use the net profit.

    There would be no logic at all in only looking at the gross profit – we calculate ROI to see how well the division is performing and the net profit measures the overall profitability, not the gross profit.

    November 16, 2014 at 7:41 am #210323
    mambo.emma
    Member
    • Topics: 4
    • Replies: 6
    • ☆

    Thanks a lot tutor for clearing my doubts

    November 16, 2014 at 9:54 am #210388
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54758
    • ☆☆☆☆☆

    You are welcome 🙂

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