how we can calculate ROI ?
Answer Posted / chaitanya
ROI (Return on Investment or Return on capital Employed) =
Return/Capital Employed * 100.
RETURN = Net Profit
+/- Non-trading adjustments(but not accrual
adjustments for amortization of preliminary expenses,
goodwill,etc)
+Interest on long term debts + provision for tax
-Interest/Dividend from non-trade investments.
CAPITAL EMPLOYED = Equity Share Capital +Reserve and
Surplus +pref.Share captial +Debentures and other long term
loan -Misc. expenditure and losses -Non-trade Investments.
Intangible assets (assets which have no physical existence
like goodwill, patents and trademarks) should be included in
the capital employed. But no fictitious asset should be
included within capital employed.
Is This Answer Correct ? | 9 Yes | 3 No |
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