Profit ratios equations Flashcards
1
Q
Gross profit margin
A
Gross profit divided by net sales
2
Q
Operating margin
A
Operating income divided by net sales
3
Q
NET profit margin
A
Net income divided by net sales
4
Q
NOPAT (net operating profit after tax) margin
A
EBIT * (1-tax rate) / net sales
5
Q
Return on assets capital ROA
A
Net income divided by total liabilities and equity
6
Q
Return on equity ROE
A
Net income divided by owners equity(average)
