Accounting return on investment

A measure of profitability based on accounting profits divided by the book value of invested capital.

This measure may be calculated in a number of different ways, for example:

[Average annual accounting profit over the project life] ÷ [Average book value of investment in the project]

See also

• Accounting
• Accounting rate of return
• Book value
• Invested capital
• Profitability
• Return on investment