The return of investment ratio puts a company’s profit in relation to its capital. The Rol value shows how successful and efficient the company is. It also helps to assess how profitable and efficient certain investments made by the company are. This is true regardless of the size and form of the company.
Nevertheless, this evaluation tool should never be seen as the sole parameter for corporate decisions. This is due to the omission of factors such as customer satisfaction, market situation and competition. For an all-encompassing result, other valuation methods should always be consulted.