Return on investment is the ratio of net effectiveness to overhead (results to resources). Net effectiveness is the revenues that accrue under vertical integration minus the direct (variable) costs incurred after integrating. For vertical integration to be efficient, it must somehow increase revenues more than it increases variable costs in order to improve net effectiveness. It is not enough merely to improve net effectiveness. Vertical integration is certain to encumber resources, thereby increasing overhead. The use of these resources must be justified by the increase in net effectiveness.