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ROI

This topic has 1 reply, 2 voices, and was last updated 10 months ago by John Moffat.

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May 3, 2022 at 1:15 pm #654805
hermela
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Another disadvantage is that ROI is based on accounting profits,which are subjective, rather than cash flows.
Sir in this statement it is said that profit is subjective how can profit become subjective?
May 3, 2022 at 4:10 pm #654825
John Moffat
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The profit depends on the accounting treatment of various items. For example, the method and rate of depreciation used will affect the profit. This is subjective because there is no ‘rule’ as to how depreciation should be calculated.
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