In today’s briefing:
- Few Companies Include ROE and ROIC as KPIs in Their Mid-Term Management Plans
Few Companies Include ROE and ROIC as KPIs in Their Mid-Term Management Plans
- Although many companies now disclose numerical targets in their mid-term management plans, only a few still use ROE or ROIC as numerical targets(15% 1,801 companies of Metrical Universe, March 2023).
- The fact that many companies that don’t include ROE or ROIC as KPIs indicates that the management wasn’t aware of the return from the shareholders’ perspective or cost of capital.
- The 3-year mid-term business plan is built on the foundation of the actual project in progress and should be outlined to reflect its cash allocations and cash flow returns.
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