Stylish Tile & Bath Ltd provided the following financial information for 2020: Net Profit €72,000 Issued Ordinary Share Capital €450,000 Long Term Loan €100,000 Retained Earnings €26,000 (i) Calculate the Return on Investment (ROI) for the owners of Stylish Tile & Bath Ltd for 2020 - Leaving Cert Business - Question 8 - 2021

To analyse the significance of the change in the Return on Investment for Stylish Tile & Bath Ltd:

1. Attracting Investors: A higher ROI makes the company more attractive to potential investors. When the ROI improves, it signals that the company has become more efficient in generating returns, encouraging investors to consider investing.

2. Expansion Decisions: The positive change in ROI can lead to decisions regarding business expansion. Management may choose to utilize retained earnings or reinvest profits to fund growth opportunities, capitalizing on this trend.

3. Improving Profitability: An increase in ROI reflects better profitability. Management can use this information to assess business performance and make informed decisions regarding operational efficiencies or cost management.

4. Employee Relations and Wages: A growing ROI can facilitate negotiations with employee unions for better wages or benefits, as the company appears to have sufficient profits to distribute, thereby improving employee satisfaction.