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Wednesday, July 22, 2009

Profitability Ratios Related to Investments:

Profitability Ratios Related to Investments:

Return on Investments(ROI):

It is computed by relating the profits of a firm to its investments. Such ratios are popularly termed as ROI. There are three different concepts of investments for computation:

Assets,

Capital employed,

Shareholders’ equity,

They are

(1) Return on assets,

(2) Return on capital employed,

(3) Return on shareholders’ equity.

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