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Residual Income and ROI

This topic has 1 reply, 2 voices, and was last updated 3 years ago by John Moffat.

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January 26, 2022 at 8:59 am #647504
James124
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ROI provides relative measure of investment performance but Residual Income don’t.
What does this mean tutor?
January 26, 2022 at 12:39 pm #647519
John Moffat
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ROI looks at the profit relative to the size of the business (by expressing the profit as a % of the amount invested), and so different sized divisions can be compared. This is not the case for the RI.
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