The residual operating income (ROPI) model focuses on net income which is a more accurate measure of future profitability than expected cash flows.

Question

Quizplus · Accepted Answer

The ROPI model focuses on operating income after taxes, not net income, and it emphasizes earnings over cash flows for evaluating future profitability, but it doesn't claim one is more accurate than the other.

The Residual Operating Income (ROPI) Model Focuses on Net Income