THE ANALYSIS OF ECONOMIC PERFORMANCES USING RETURN ON INVESTMENT
THE ANALYSIS OF ECONOMIC PERFORMANCES USING RETURN ON INVESTMENT

Summary/Abstract: Having in mind the importance of the investments for the sustainable increase of the company value we propose a model of analyzing the return on investment (ROI) with biannual data from the 2004-2011 period for five companies listed at the Bucharest Stock Exchange. Using the model proposed in the present work we have intended to analyze the relationship between several economical and financial measures and the efficiency of past investments. We have obtained results somehow different to a similar study proposed by Hȍbarth (2006,) as we operated with a lesser amount of observations, which affected both the number of variables and the relations between the dependent variable and the regressors. After several runs of the model with the STATA program we found that 64% the evolution of ROI was explained by the influence exerted by the determinants of the cash conversion cycle, return on assets and by the relative modification of the sales turnover.

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