Another Example Of Practical Application

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This Reinforces The Importance That Earnings Should Not Always Be The Only Criteria Used To Find The Real Value Of A Company. How To Apply The Results In The Company? Imagine That An E-commerce Wants To Expand Its Operations And Deliver To Other States In The Country. Brazil. This Decision Cannot Be Made Overnight, Right? It Is Necessary To Carry Out Planning Regarding The Expected Cash Inflow And Outflow Values ​​for The Operation To Be Carried Out.

Cfroi Can Then Be Used To Deal With Possible Obstacles To line data Better Decision-making. Of Cfroi Is Being Able To Identify The Best Use Of Resources In The Company. Even Though The Stipulated Goals Are Achieved At The End Of A Period, This Does Not Mean That Productivity And Efficiency Were Satisfactory. The Metric Helps To Better Understand The Real Use Of Internal Resources.

Even Though It Is Widely Used By External Agents Before Making An Investment, Cfroi Also Ends Up Being Very Useful For Companies That Want To Remain Competitive Within A Scenario Of A Lot Of Competition And Market Demands. This Provides A Consistent And Broader Approach That Can Be Used To Compare Operational Performance Across A Portfolio, A Market Or A Global Universe Of Companies.