- This topic has 1 reply, 2 voices, and was last updated 9 years ago by
.
Viewing 2 posts - 1 through 2 (of 2 total)
- Posts
dear sir
Can I use Roi and Ri to measure company’s profitability or these are strictly for company’s divisions .ROI is equivalent to ROCE in a company. In a company context the ratio is called ROCE.
In divisions, the supplier of capital is the head office and RI ensures that a charge for the use of capital is made. In a company context, suppliers of capital are lenders and equity shareholders. The equivalent to RI would be EVA as a deduction is made at WACC for the capital employed (of course in EVA other adjustments are made also).
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.