Long and short of ROI

by Dan Malovany
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During the past few years, return on investment (ROI) has become short-term, with approximately four out of 10 baking companies using “one year or less” as their standard expectations for payback on expenditures, according to Baking & Snack’s 20th Annual Capital Spending Survey.

However, the percentage of bakers listing a two-year ROI doubled to 19% since 2010. Three-year ROI increased to about 32% from 25% in 2010.

“Near-term is holding steady, but a three-year ROI is up significantly from a few years ago, and that’s encouraging,” said Marjorie Troxel Hellmer, president of Kansas City, MO-based Cypress Research Associates, which conducted the

survey. “That’s signaling again that their outlook is getting further out. That’s a sign that we’re regaining some footing.”

ROI of more than three years declined from 21% in 2010 to 10% in the most recent survey.

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