Return on Investment – Indicator for Measuring the Profitability of Invested Capital

Open access

Abstract

The decision of investment is a strategic decision and it is an integral part of the general policy of the company. The purpose of this paper is to present the manner in which the ROI (Return on Investment) indicator can be used in the analysis of investment projects.

Understanding the concept of investment is the first issue addressed. Then ROI is analyzed, highlighting the advantages and limitations of its use. They are addressed the aspects related to the manner in which the size of the ROI indicator is influenced by the method of valuation of assets, but also by the method of calculation of the working capital. The research results can be used by any investor to select based on ROI indicator, an investment project of several possible. As well, ROI may serve after completion of the investment to measure its profitability.

If the inline PDF is not rendering correctly, you can download the PDF file here.

  • Albu N. Albu C. (2003) Instrumente de management al performanţei. Volumul II. Control de gestiune Bucureşti: Ed. Economică

  • Berland N. (2009) Mesurer et piloter la performance available on-line at: http://www.management.free.fr/publications/Contenu/ebook/bibliotheque.htm

  • Davasse H. Lannglois G (2001) Comptabilité de gestion. Gestion Prévisionnelle 2e édition Paris : Ed. Foucher

  • De Rongé Y. Cerrada K. (2009) Contrôle de gestion 2e édition Paris : Pearson Education France

  • Diaconu P. Albu N. Mihai S. Albu C. Guinea F. (2003) Contabilitate managerială aprofundată Bucureşti: Ed. Economică

  • Dumitraşcu V. (2014) Managementul investiţiilor Bucureşti: Ed. Universitară

  • Gervais M. (1994) Contrôle de gestion par le système budgétaire 3 e édition Librairie Vuibert

  • Leclere D. Lesel Ph. Doubrulle L. (2000) Control de gestiune translation București: Ed. Economică

  • Mieilă M. (2009) Managementul investiţiilor Bucureşti: Ed. Cartea Studenţească

  • Prelipcean G. (2008) Strategii investiţionale în afaceri Distance learning course University Stefan cel Mare Suceava available on-line at: http://www.seap.usv.ro/~ro/cursuri/FB/FB_II_SIA.pdf

  • Vasilescu L. (2011) „Evaluarea performanţei firmei pe baza indicatorilor financiari” Analele Universităţii “Constantin Brâncuşi” from Târgu Jiu Seria Economie Nr. 3 p: 162-163 available on-line at: http://www.utgjiu.ro/revista/ec/pdf/2011-03/20_LAURA_VASILESCU.pdf