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How To Really Measure a Company's Innovation Prowess

Harvard Business Review

Return on equity (net income divided by equity) results from multiplying three key operating ratios: Profitability (net income over sales). Operating efficiency (sales over assets). Financial leverage (assets over equity). Investment efficiency (ideas explored divided by total capital and operational investment).

article thumbnail

How To Really Measure a Company's Innovation Prowess

Harvard Business Review

Return on equity (net income divided by equity) results from multiplying three key operating ratios: Profitability (net income over sales). Operating efficiency (sales over assets). Financial leverage (assets over equity). Investment efficiency (ideas explored divided by total capital and operational investment).