Chapter 8 Return on Equity
Measurement Need
Companies are funded by shareholders whether publicly held (ownership of the company is widely dispersed among members of the public in the form of shares of stock, and the company’s financial performance is subject to specific transparent reporting requirements), or privately held (ownership is usually kept to a much smaller group of investors and the company’s financial performance is not publicly reported). Owners are interested in knowing how much profit is generated from their investment, management is responsible for the effective use of the investor’s capital, and marketers must ensure that the product and customer expenditures are effectively directed to grow revenues responsibly and profitably. ...
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