The McGraw-Hill Companies, Inc., 2008. All rights reserved. Thus, by including sales specifically i
The McGraw-Hill Companies, Inc., 2008. All rights reserved. Thus, by including sales specifically in ROI computations the manager is able to discover possible problems, as well as reasons underlying a strong or a weak performance. Looking at Company A compared to Company C, notice that C”s turnover is the same as A”s, but C”s margin on sales is much lower. Why would C have such a low margin? Is it due to inefficiency, is it due to geographical location (thereby requiring higher salaries or transportation charges), is it due to excessive materials costs, or is it due to still other factors?
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