ROI

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muskanp...@gmail.com

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Sep 22, 2021, 7:42:16 AM9/22/21

to noc21-mg7...@nptel.iitm.ac.in

Hi,

I have a question about what is happening in this video at 00:05:49 -

http://www.youtube.com/watch?v=tSkPHe8P9x8#t=349s.

Why in ROI in the denominator shareholders fund and long term loans are taken?.

Thanks!

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NOC21 MG75

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Sep 22, 2021, 2:14:33 PM9/22/21

to Discussion forum for Financial Accounting, muskanp...@gmail.com

Dear participant

In ROI or ROCE, The shareholder's fund and long terms loan are taken in denominators because In this ratio we tries to find out how much return or profit is generated by investing all of these funds, and the company's shareholder fund and long-term loan are considered as Investment in the company and ultimately these funds are really invested.