What are the issues to consider in calculating the roi

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Return on Investment (ROI) for Innovative Companies A survey by BusinessWeek and the Boston Consulting Group identified the world's 25 most innovative companies, looking at three dimensions of innovation: process innovation, product innovation, and business model innovation. The top-five companies were Apple, Google, 3M, Toyota, and Microsoft. The top-25 companies were great per- formers over the 10-year period 1995-2005. The 25 companies had an average return on sales of 3.4 percent in comparison to 0.40 percent for the Standard & Poor's 1200 Global Stock Index. The top 25 stock returns, based on increase in stock price and dividends over this 10-year period, averaged a 14.3 percent annual return, in contrast to the 11.1 percent return for the S&P Global 1200. These companies are surpassing the Global 1200 companies in part because of superior innovation.

Required: What are the issues to consider in calculating the return on investment (ROI), residual income (RI), and EVA® for a highly innovative company?

Reference no: EM13875746

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