분야
docxCapital Structure
Asset Management
Profitability
Market Value
Cash Flow
Conclusion
Profitability
Return on Asset (ROA) is (Net Income + Interest Expense(net of tex) ÷ Average Total Assets. This
ratio tells how much net income is earned by a unit of assets. Higher ratio means net income
earned by one unit of assets is large. Next, Return on Equity (ROE) is Net Income ÷ Average Total
Stockholders’ Equity. This ratio tells how much net income is earned by a unit of equity. Higher
ratio means net income earned by one unit of equities is large. Then, Operating Profit margin is
Operating Income ÷ Revenues. This ratio tells the amount of operating income per unit sales.
This figure informs that how much operating income accounts for in total revenues. When this
ratio is high, we can infer that this company faithfully devote to its main earning activity. Last test
of profitability is Net Profit margin. It is Net Income ÷ Revenues. This ratio tells the amount of
