Abstract
The main concept of performance measurement in the RWE-Group is a rate of return on invested capital. A positive spread between the rate of return on invested capital and the cost of capital rate is the main value driver. The required target-return on invested capital for business units is determined by a benchmark analysis. Net operating profit after taxes is determined by net income before financing costs, while business assets are taken from the balance sheet. The relevant profit includes return on investment in associates minus non-operating income plus implicit interest on non-interest bearing liabilities. Profit is defined before taxes. The adjustment of contingent liabilities is treated separately.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Schmalenbachs Zeitschrift für betriebswirtschaftliche Forschung
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
