Useful Business Ratio for Directors ---------------------- Management Consulting Service in Cambodia

Useful Business Ratio for Directors

As a director, you need to have a deep understanding of your company's financial performance.

One useful business ratio to consider is the return on investment. Return on investment is a financial ratio that measures the profitability of an investment while taking into account its total cost. Calculating return on investment allows decision-makers to compare different investments and determine which one will yield the greatest return.

Other useful financial ratios for directors to consider include internal rate of return and net present value. These commonly used financial ratios in Australian business management are based on the principle that the cost of investment must be related to its benefits. In addition to financial ratios, directors should also evaluate efficiency criteria such as profit, return on investment, and the profit ratio.

Furthermore, both return on equity and return on assets are important tools to measure the capabilities of a company. Return on equity is a strategic measurement tool that determines the ability of a company to generate returns on shareholders' equity. A higher return on equity ratio indicates better returns for shareholders and growth of the business. Financial ratios play a crucial role in the analysis of financial statements as they provide directors with the proper basis for evaluating the financial status of a business entity.

*Management Consulting Service in Cambodia

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