This extract from the annual report of Punch Taverns refers to ‘return on investment’ (ROI) as an alternative description of the accounting rate of return.

A further £48.7m was invested in the acquisition of 80 individual pubs during the year, together with investment of £46.2m on existing pubs within the estate and £5.0m on infrastructure. We continue to see excellent returns on our pub investments and good opportunities to develop our estate further.

Of the £46.2m investment, £34.9m was spent on 580 profit enhancing projects (including 74 from the Pubmaster estate), generating a first-year pre-tax ROI of 29%.

Discussion points
1 How will investors form a view on the accounting rate of return (ROI)?
2 How does the company reassure investors about the value of the investments in a non-quantified way?