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Cma Exam > B - Topic 3 Performance Measures > Flashcards

B - Topic 3 Performance Measures Flashcards

1
Q

Formula for Return on Investment (ROI)

A

Return on Investment =
Net profit of business unit/
Assets of business unit

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2
Q

Formula for Financial Leverage

A 
Financial leverage= 
assets/
equity
Finanical leverage = 
total assets/
average shareholder's equity
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3
Q

Residual Income (RI)

A

Residual Income =
Net Operating Profits of Business Unit -
(assets of business unit x required rate of return)

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Cma Exam (5 decks)

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