To evaluate overall performance, return on investment and residual income measures are more appropriate than return on sales.

Question

Quizplus · Accepted Answer

Return on investment (ROI) and residual income are more appropriate measures of overall performance because they take into account both the income and the capital used to generate that income, while return on sales only considers income in relation to sales. Therefore, ROI and residual income provide a more accurate picture of efficiency and profitability.

To Evaluate Overall Performance, Return on Investment and Residual Income