Summary, Conclusions and the Way Ahead
Throughout we have said that profit per pound (money) of capital, or per pound of net assets, is the traditional way of measuring the efficiency of the financial performance of a business. In Chapter 1 we gave some figures for the comparative performance of small and large firms using the ROI ratio. The most recent figures in the United Kingdom came from the ‘Wilson’ Committee. We also noted that other work has confirmed that decreasing ROI with increasing size of firm goes right across the spectrum, i.e. that ‘giants’, on average, earn the least net profit for capital employed.
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