Purchase Solution

Standard Measures: ROI or EPS

Not what you're looking for?

Ask Custom Question

I need help with the following question. Also after your response can you please provide a couple of websites for me to go and look at for further information?

1. Please provide a detailed response as to why a firm should bother with shareholder value or a stakeholder scorecard when it is simpler to simply evaluate a corporation and its SBU's just by using standard measures like ROI or earnings per share.

Purchase this Solution
Solution Summary

The response addresses the queries posted in 590 words with references.

Solution Preview

The response addresses the queries posted in 590 words with references.
//Before writing about the ROI and EPS, it is essential to know about the rationale for the Company, as to why a firm should bother with shareholder value or a stakeholder scorecard. One should know about the factors that are considered as the important for assuming the impact of shareholders//

Standard Measures: ROI or EPS

The success of any firm mainly depends on the shareholders value or stakeholders scorecard because they play a vital in the firm's development process. Maximization of shareholders value is main target of the business because shareholders are the key owners and every investor wants a maximum return on investment (Epstein, 2008). The position of the shareholders' value considers a standard measures I.e. Profitability over responsibility. In the today's business world, various factors that help in promoting the shareholders value is considered as a vital components in the firm's success (Morin & Jarrell, 2000).Economic efficiency is more important than social responsibilities for most ...

Solution provided by:
Ashish Sharma, MBA (IP)
Education
  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
Recent Feedback
  • "Thank You so much! "
  • "Always provide great help, I highly recommend Mr. Sharma over others, thanks again. "
  • "great job. I will need another help from you. "
  • "first class!"
  • "Thank you for your great notes. Will you be willing to help me with one more assignment? "
Purchase this Solution
Free BrainMass Quizzes
Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Operations Management

This quiz tests a student's knowledge about Operations Management

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

View More Free Quizzes
Related BrainMass Solutions

  • Firms position on evaluation

    measures like return on investment (ROI) or earnings per share (EPS).

  • EVA

    In my opinion, EVA is an improvement over all the three measures: ROI, ROE as well as EPS.

  • GDP

    The Standard & Poor's 500 index was down 3.19, or 0.27 percent, at 1,171.36, and the Nasdaq composite index lost 11.32, or 0.55 percent, to 2,035.83.

  • Internal failure cost

    Which of the following performance measures is (are) used to evaluate the financial success or failure of investment centers? A. Residual income. B. ROI C. Number of suppliers. D. Economic value added E.

  • Operating leverage, ROI, EVA

    For example it can reject the profitable projects if the ROI of the project is less that the standard ROI. For overcoming this limitation, EVA can be a useful tool to assess the managerial performance.

  • Control Systems, Economic Value Added, ROI Techniques

    The economic profit measures the invested capital times the (ROI - WACC). The economic basically measures in dollars, a business segments performance in comparison to the market's minimum performance. References Hock, C. (1999).

  • Measuring Financial Returns on IT Investments

    This is the widely used industry standard to justify an investment. ROI can also be used as a performance measure to evaluate the efficiency of an investment or to compare the efficiency of the number different investment options in hand.

  • Review operating leverage, ROI, EVA

    Performance measures used: Operating leverage, ROI, EVA and Operating Margin. Ratios are used for many purposes, performance measurement is one such application. However, not all performance measures are expressed as a ratio.

  • Margin, Turnover, ROI, Cost of Capital, Residual Income

    Departments that are strong here have pricing power and good cost controls, or both. Con: Does not hold department accountable for commitments of capital (assets). ROI: Pro: Measures profits in light of assets employed.

View More Related Solutions