Return on Invested Capital, Return on Investment, a Measure of the Profitability of Invested Capital, Research Evidence at Song Hong Garment Joint Stock Company

Abstract

The objective of the article is to clarify investment activities, return on investment, return on invested capital, and Return on Investment's effectiveness in measuring the profitability of invested capital. To accomplish the stated research objectives, the authors have used the method of document research to build a research theoretical basis for the article. Next, the methodology and meta-analysis method was used to analyze the secondary data collected from the financial statements of Song Hong garment joint stock company. The results of analysis and data calculation at selected enterprises for empirical research have shown that Return on Investment can be calculated through Return on invested capital. From the results and comparative analysis of Return on invested capital, the Return on Investment indicator will also have a positive sign. This has confirmed the investment performance of Song Hong garment joint stock company and shows the effectiveness of Return on Investment in measuring the profitability of the invested capital. However, the authors also think that Return on Investment or Return on invested capital are also relative and they are not the only decisive indicators. Therefore, to make investment decisions, it is necessary to use many indicators to evaluate.