PROFITABILITY Flashcards
1
Q
GROSS PROFIT MARGIN RATIO
A
(NET SALES - COGS) / NET SALES
2
Q
OPERATING PROFIT MARGIN
A
OPERATING INCOME / NET SALES
3
Q
NET PROFIT MARGIN RATIO
A
NET INCOME / NET SALES
4
Q
EBITDA MARGIN
A
EBITDA / NET SALES
5
Q
RETURN ON ASSETS (ROA)
A
NET INCOME / AVERAGE TOTAL ASSETS
6
Q
RETURN ON EQUITY (ROE)
A
NET INCOME / AVERAGE TOTAL EQUITY
7
Q
RELATIONSHIP BETWEEN ROA AND ROE
A
ROA = ROE × (1 - DEBT RATIO)
8
Q
SUSTAINABLE GROWTH RATE
A
ROE × (1 - DIVIDEND PAYOUT RATIO)
9
Q
DUPONT ROA
A
(NET INCOME / NET SALES) × (NET SALES / AVERAGE TOTAL ASSETS)
NET PROFIT MARGIN × TOTAL ASSET TURNOVER
10
Q
DUPONT ROE
A
(NET INCOME / NET SALES) × (NET SALES × AVG TOTAL ASSETS) × (AVG TOTAL ASSETS × AVG TOTAL EQUITY)
NET PROFIT MARGIN × ASSET TURNOVER × EQUITY MULTIPLIER
