SELF TEST #24: Identifying Shortfalls in Financial Performance
How does the Company know that it has achieved a low-cost position?
How does a company measure Return on Investment?
When would a company use each of the various measures of Return on Investment?
Companies in an industry charge somewhat different prices for their products. Wouldn’t a difference in pricing affect Return on Investment?
Do the industry’s largest competitors usually lead their industries in Return on Investment?
What are reasonable targets for Return on Investment?
What measures would a company use to evaluate its relative position on operating costs, that is costs of People and Purchases?
What are median figures for operating margins?
How would the Company measure its capability at using capital?
What levels of Capital indicate that an industry is capital intensive?
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