Evaluating Profitability Flashcards
1
Q
What’s the computation for Profit Margin Ratio?
A
net income/net sales
2
Q
What’s the computation for Rate of Return on Total assets
A
Net income + interest expenses / average total assets
3
Q
What’s the computation for Assets Turnover Ratio?
A
Net sales / Average total sales
4
Q
What’s the computation on the Rate of return on common stockeholders equity?
A
Net income - Preferred dividends / Average common stockeholders equity
5
Q
What’s the computation for Earning per shares?
A
Net income - preferred dividends / Weighted average number of common shares outstanding.
