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John Moffat.
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johnbriane
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sir i have two questions
1) does not facilitate easy comparison between divisions of different sizes is an disadvantage of both roi and ri correct ?
2) based on accounting measures of profit and capital employed which maybe subject to manipulation is also a disadvantage of roi and ri am i correct sir ?
thank you
John Moffat
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1. No. It is a disadvantage of RI because a bigger division is going to have a bigger RI. It is not a disadvantage of ROI because that is calculated as a %.
2. Yes, that is true.
johnbriane
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