The Appliance Division, on the other hand, had lower ROI because margin declined and the turnover rate stayed constant. Although more information is needed before any definitive conclusion is reached, the different responses to similar difficulties may say something about the relative skills of the two managers.
Advantages of the ROI Measure When ROI is used to evaluate performance, division managers naturally try to increase it. This can be accomplished by increasing sales, decreasing costs, and/or decreasing investment. Three advantages of using ROI are as follows: