Profitability Ratios Flashcards
1
Q
Return on Equity (ROE)
A
Net Earnings / Average Shareholders’ Equity
2
Q
Return on Assets (ROA)
A
Net Earnings / Average Total Assets
3
Q
Gross Profit Margin Ratio
A
Gross Profit / Net Sales
4
Q
Net Profit Margin Ratio
A
Net Earnings / Net Sales
5
Q
Earnings per Share
A
Net Earnings (available to common shareholders) / Average # of Common Shares Outstanding
6
Q
Quality of Earnings
A
Cash Flows from Operating Activities / Net Earnings
