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Presented by: MMS & PGDM (First Year) Mentored by: Finance Faculty of CRKIMR & CIMR Facilitated by: Prof. Leslie Rebello

Return On Investment

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Return On Investment What it measures

 Overall Profit Or Loss On The Total Investment.  Expressed As A Percentage Of Total Funds.

Return On Investment Formula

 Return On Investment =Net Profit/Total Investment  Return On Assets= Net Profit Ratio * Asset Turnover Ratio

Return On Investment Significance

 Measures Profitability.  Measures Managements ability to generate profit.

Return On Investment Application in corporates

 To Know Whether Company Is On Right Track.  To Compare Companys Profitability.  To Compare ROI Of Different Projects.

Return On Equity

Return On Equity What it measures

 Overall profit or loss on the total Equity.  Expressed as a percentage of total Equity.

Return On Equity Formula

 Return On Equity =Net Income/ Owners Equity

Return On Equity Significance

 Shows The Companys Ability To Increase Its Earning Per Share.  Shows How Well Company Is Using Its Money.  Applicable For Majority Of Industry.

Return On Equity Application in corporates

 It Allows To Compare Equity With Other Investment.  To Compare Performance Of The Company.  To Evaluate Trends In Business.