CFOs should avoid ROI if they want company to thrive

04/11/2013 | Wall Street Journal/CFO Journal, The

That ubiquitous metric return on investment, and its related return on equity and internal rate of return, should be avoided by CFOs because it ultimately will cause a company to "underinvest, under-innovate, under-scale, and under-grow," writes Bennett Stewart, CEO of EVA Dimensions. Economic value added -- a firm's profit less a capital charge -- is a better metric, Stewart notes.

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