ACCT1501 Lecture Notes - Lecture 10: Financial Statement Analysis, Earnings Before Interest And Taxes, Profit Margin
Document Summary
Measures a company"s ability to earn profits. Determines how well the company performed and is likely to perform in the future. Indicates how much return a company is generating on historically accumulated shareholder"s equity. Determines the after tax return the managers are earning on the assets under their control. Determines the return earned on assets under management control. Measures performance of managers in converting sales to net profit. Measures the ability of managers to generate profit from sales. Determines the company"s ability to generate cash resources relative to the company"s size. Relates earnings attributable to ordinary shares to the number of shares outstanding. Relates the accounting earnings to the market price per share to reflect present company performance with market expectations. Measures the portion of earnings paid to shareholders: activity(turnover) ratios. Measures the efficiency of a company"s operations. Measures asset turnover, inventory turnover and accounts receivable. Determines the amount of sales volume associated with each dollar of assets.