| Summary: | The financial rate of return is a financial analysis indicator with an important role in assessing
the economic and financial performance of an enterprise. Thus, if the economic rate of return
expresses the return on invested capital only from the point of view of the operating activity, the
financial rate of return does nothing more than to quantify the return on capital. If we start from the
consideration that the financial rate of return expresses the efficiency of the equity capital of an
enterprise, we realize that it has a major importance for the shareholders of that enterprise because
they can see the effect of the investments made in that enterprise, if these investments are profitable
and if they will still be interested in participating in the development of the enterprise, even through
new investments. The purpose of the paper is to highlight the importance of financial returns in
various situations, as exemplified, and the impact on both the company and the shareholders.
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