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How To Really Measure a Company's Innovation Prowess

Harvard Business Review

Perhaps a company's ability to innovate doesn't last long. So it began disaggregating return on equity into three components. 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).

article thumbnail

How To Really Measure a Company's Innovation Prowess

Harvard Business Review

Perhaps a company's ability to innovate doesn't last long. So it began disaggregating return on equity into three components. 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).