An MBA still remains one of the most coveted courses worldwide, but it is one which incurs huge investment. With lakhs of professionals enrolling for the degree every year and an ever-growing number of intakes from B-schools, there are many question marks over the costs that come with it. The average cost associated with pursuing an MBA degree of the top B-Schools in India ranges from INR 6,00,000 to as high as INR 20,00,000. This kind of investment hinders the potential future of many MBA aspirants, in a low per-capita income country like India. While the investment costs are hefty, there are only a few colleges offering satisfactory returns on investment (ROI). In this article, we will help you understand how the return on investment (ROI) is a criterion you must consider before choosing a B-schools and which are some of the prominent B-schools offering highest returns.
What is Return On Investment?
Return on Investment (ROI) is a metric which measures the efficiency of an investment. In simple terms, ROI calculates the returns an investment is capable of producing over time. In purely numerical terms it is calculated as follows. ROI = Net Profit / Total Investment * 100. To calculate the ROI of the MBA program, you’d need to factor in the average post-MBA salary of the program and then weigh it against the cost of that program. As mentioned earlier, the program duration plays an important role as the expenditure significantly increase for a 2-year course as against a one year MBA program. Let us understand this better with an example: Suppose, the fees of a particular college offering an MBA degree is 4 LPA, and the average annual package is 6LPA Then the ROI will be: 6/4 * 100 = 150% This would mean that the investment cost will be able to generate a return of 150% return. In purely financial terms, it is a ratio used to calculate the benefit an investor will receive in relation to their investment cost. The higher the ratio, the greater the benefit. Although one serious drawback to calculating the return this way is not including the duration of time, which is a huge factor in determining the capital costs associated with the program.
Factors affecting the ROI:
Return on Investment (ROI) is a metric which measures the efficiency of an investment. ROI directly tries to measure the return a particular investment is capable of producing over the duration of time. ROI is a cumulation of tangible, intangible, financial and non-financial benefits. It helps the professionals in objectively deciding the right B-school based on the financial constraints and long term career path. ROI for different surveys weigh in various parameters on an unequal basis. Hence there are sometimes contradictory results and it makes it difficult for the students to decide based on them. One of the most internationally trusted surveys released by Financial Times (FT) releases its annual global MBA rankings for colleges. One of the assorted benefits which include value for money is an indicative parameter in the survey. This value is derived by dividing the post-MBA alumni salary three years after graduating by the total cost of the program. This cost would include tuition fee, opportunity cost and related expenditure forgone during the length of the duration minus the financial aid received (scholarships). Apart from these benefits, MBA programs offer intangible benefits which are difficult to measure in monetary terms like alumni knowledge, peer learning, contacts gained, personal development, etc.
Choosing the right B-school:
By now you must have understood the value of ROI in choosing the right B-School. Here is the list of colleges offering the best returns:
1) FMS, Delhi Nothing can beat FMS when it comes to ROI. Under the prestigious Delhi University, FMS’s average package wavers around 20 lakh with a tuition fee of around INR 35,000. FMS is a brand placed alongside the reputed IIMs.
2) DMS, IIT Delhi Also under Delhi University, Department of Management Studies offers an average package of around INR 12 lakhs with just INR 25,000 as its tuition fees for two years.
3) JBIMS: Jamnalal Bajaj, once called the CEO factory has a habit of producing excellent leaders. The college has an entrance reservation policy which makes it difficult for people outside Maharashtra to enter because of the lack of seats for them. Average Package: 17 Lakhs.
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