Commonly used are
1, return on investment
=
net profit
/
Net assets.
Among them, the net profit will be affected by accounting policies and needs to be adjusted according to their own needs;
Net assets can be
The net assets on the statement can also be
Total investment funds, or
Total working capital,
It is also determined according to your own needs.
2. payback period of investment
=
Total investment/annual net profit,
Refers to how many years you can recover your investment.
3、
Net present value method,
This is responsible for those who have no financial knowledge. 4,
Connotation rate of return method,
It's kind of like 3,
It is also calculated using financial knowledge.
It means that regardless of the financing structure, the return on investment of the project itself is large.
A2: The rate of return on investment can be regarded as discounted and non-discounted;
1
Undiscounted return on investment
=
yield
/
Initial expenses
2
Discounting is to discount the investment income of n periods first.
Then pay the investment income.
As for the discount
The interest rate depends on the market interest rate at that time and investors' preference for risk.
A3: Return on Investment = earnings before interest and tax/Investment Cost earnings before interest and tax considers the debt cost and income tax.
Generally, the impact on income tax and the concept of time value of funds will be considered when calculating the return on investment.
You can use the current market risk rate to find out the cost of capital rate of your company and calculate the profitability index.
A4: There is no fixed format for calculating accounting rate of return by different accounting methods and industries.