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Drugs Company Ciba Geicy
Finally, Ciba calculated a return on assets to measure the economic performance of its divisions. Thenumerator of the return on assets calculations took the divisional contribution after services, subtractedallocations of indirect function
expenses and taxes and added back interest expense. They then divided thenumerator by the total divisional assets plus an allocation of corporate assets. Each division had mediumand long-range financial targets for return on assets and its performance
factor. Ciba felt this was the mostimportant measure of overall performance.
Ciba did similar analyses for group companies and individual products.
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