The return describes the overall success of an investment within one accounting period. It therefore indicates the ratio of the payout to the deposits made by this system. The return is therefore important for measuring the success of an investment

 

The aim of every financial or capital investment is to achieve a certain amount with the invested capital. This is commonly referred to as the rate of return. The rate of return, also known as profitability, can be viewed in terms of payment or balance sheet:

Payment-oriented consideration: In the case of the total return on capital from the payment-oriented perspective, the company’s surplus payments are in relation to the total capital employed. If you want to find out the return on equity, you have to deduct the interest payments to the lenders from the company’s surplus.

Balance sheet-oriented view: The profit for the period is set in relation to the company’s total available capital (equity and debt).

In the area of capital investments there are four types of income: interest, dividends, price gains and currency gains.

Extended term of return:


The rate of return is predominantly used in the case of capital investments. However, there is also the possibility of viewing the return in general as a means of measuring the success of a direct investment. Participation does not have to take the form of capital, but can also take the form of real estate, own work or raw materials.

We offer guest articles and sponsored posts

You have your own, interesting thoughts around the theme world of the blog and would like to share them in a guest article on my blog? - But gladly! You can thereby address customers and professionals.

Gendernote: I have used the masculine form for ease of reading. Therefore, unless an explicit distinction is made, it always refers to women, diverse as well as men, and people of all origins and nations. Read more

Spelling: I translated my German Blog to English - so you can also read my Recommendations. Please be sorry if this English is not so good.




Image-Source Titlepicture: Fotolia.de 2016 – buyed License

Author

We are the international Version of Projektify.de a Marketplace for buying and selling webprojects. We give here recommendations for online-businesses and offer a tool for M&A Companies.

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close