a measure of the effectiveness and efficiency with which managers use the resources available to them, expressed as a percentage. Return on equity is usually net profit after taxes divided by the shareholders’ equity. Return on invested capital is usually net profit after taxes plus interest paid on long‐term debt divided by the equity plus the long‐term debt. Return on assets used is usually the operating profit divided by the assets used to produce the profit. Typically used to evaluate divisions or subsidiaries. ROI is very useful but can only be used to compare consistent entities ‐‐ similar companies in the same industry or the same company over a period of time. Different companies and different industries have different ROIs.