7. Return on Investment (ROI)

There are many ways to measure a company’s success. The contribution a company makes to society or human progress is one measure of success or failure. Another measure is the satisfaction and happiness of a company’s customers or employees.

But in business the score is kept in dollars. We are concerned here with financial measures of success or failure. A company that serves society, satisfies its customers, and makes its employees happy—and loses money—will soon be out of business. The best kind of company is one that can do good in the world at the same time it makes money.

The simplest measure of financial success is the bottom line—net profit after taxes. A company with large net profits after taxes is successful. ...

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