"ROI=Controllable Profit/Capital Employed
Controllable profit is usually taken after depreciation but before tax."
Sir in my study text the aforementioned statements are stated, and i have a doubt pertaining to it. Why is controllable profit after deprn? becuase deprn is a non-controllable cost. So technically profit figure should be EBITDA.
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ROI
6y ago#1It depends who controls the purchase of the non-current assets. If the division decides on the purchases then the depreciation is controllable. If it is the head office who decided on the purchase then the depreciation is not controllable by the division.
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