PROFITABILITY RATIOS Flashcards
Gross Margin
Net sales
Operating profit margin
Net sales
Free cash flow
NO PAT \+Depreciation \+ Amortization - Capital expenditures - Net increase in working capital
NOPAT - net operating profit after taxes
Residual income
Operating Profit - Interest on Investment
Interest on investment
Invested capital x required rate of return
Economic Value Added (EVA)
NOPAT - Cost of Financing
Cost of Financing
(Total assets - Total liabilities)
x WACC
Economic Rate of Return on CS (Total Return)
Dividends +
Change in Price
____________
Beginning Price
Return on Investments (Based on Assets)
Net Income
_______________________________
Total Assets or Average Invested Capital
DuPont ROI Analysis of ROI
Return on Sales X Asset Turnover
Return on Sales
Net Income
__________
Sales
Asset Turnover
Sales
_________
Total Assets
Return on Equity
Net Income
_________________________
Average Common Stockholder’s Equity
Common Stockholder’s Equity
Stockholder’s Equity - PS Liquidation Value
Return on Assets
Net Income
___________
Average Total Assets
