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MAF ratios > Profitability > Flashcards

Profitability Flashcards

1
Q

Gross margin

A

Gross Profit1 / Sales1

how much profit a company makes as a
percentage of its sales
benchmark: industry-specific

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2
Q

Net margin

A

Net Income1/Sales1

How much profit a company makes as a percentage of its sales
benchmark: industry specific

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3
Q

Operating margin

A

Operating Profit1/Sales1

How much profit a company makes as a percentage of its sales
benchmark: industry specific

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4
Q

Profit (EBIT) margin

A

EBIT1/Sales1

How much profit a company makes as a percentage of its sales
benchmark: industry specific

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5
Q

Return on equity (ROE)

A

Net Income1/Total equity0

how much profit each dollar of common shareholder equity generates
benchmark: industry-specific

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6
Q

Return on assets (ROA)

A

EBIT1/Total Assets0

how effectively can a company earn a return on its investment in assets
benchmark: industry-specific

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7
Q

Return on capital employed (ROCE)

A

EBIT1/Capital employed0
capital employed=Equity + Dib

how much profit each dollar of employed capital generates
benchmark: industry-specific

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8
Q

Return on operating net assets (RONA)

A

Operating profit1/Operating net assets0

operating net assets = capital employed-financial assets
financial assets = cash and cash equivalents + marketable securitities

how much profit each dollar of operating net assets generates
benchmark: industry-specific

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9
Q

Capital employed

A

Equity + Dib (=Interest bearing debt)

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10
Q

Operating net assets

A

Capital employed - Financial assets (=cash and cash eq. + marketable securities)

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11
Q

Financial assets

A

Cash and cash equivalents + Marketable securities

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MAF ratios (8 decks)

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