dolution

At a meeting of the top managers in your company, President Anne Thompson points out that stockholders have been pressuring the organization to increase return on assets. She asks for suggestions. Four of your colleagues respond in the following manner:

• “Sales, sales, sales. You’ve got to have more revenue to increase return.”

• “Cut the expenses. How can you get a higher return if you don’t keep more of your sales dollar?”

• “Expansion! More productive assets! Growth is the way to go.”

• “No, no! Cut the assets! Sell those that will bring the best price!”

Evaluate your coworkers’ comments. Will these strategies produce a definite increase in return on assets? What are the risks and rewards of each strategy?