Operating returns / investment returns Flashcards
1
Q
Operating / investment returns
A
Measures of a firm’s returns on investment
- compare its income to its investment using financial information from the balance sheet / statement of financial position
2
Q
Return on equity (ROE)
A
Net income / Book value of equity
3
Q
Return on assets (ROA)
A
(Net income + interest expense) / Total assets
4
Q
Return on invested capital (ROIC)
A
(EBIT x (1-tax rate))/ (Book value of equity + net debt)
5
Q
Asset turnover
A
Sales / Total assets
