ABSTRACT
The concept of Return on investment (ROI) assists management in maintaining the necessary growth for survival. It assists in highlighting historical performance and enables managers to use such data in projecting future performance. As competition becomes tougher, small versus medium-sized companies, large versus large companies, products versus products, and markets versus markets, it becomes evident that success is largely based on financial performance. ROI is also important because it provides management with an easy and understandable mathematical calculation. This calculation is used to enhance the decision-making process through better planning, by assisting in the evaluation of investment opportunities, by evaluating management performance, and by evaluating the overall position of the company in relation to the marketplace. Return on investment provides management with an easy method of more effectively evaluating and communicating both past and anticipated future performance in an effort to increase growth and productivity.
