RSM219H1 Study Guide - Income Tax, Asset, Current Asset
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RSM219H1 Full Course Notes
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Document Summary
Profitability = measures the earnings or operations success of a company for a specific period of time. Measures the net earnings for each common share. Not meaningful to compare among companies b/c wide variation. Avg common shareholders" equity in number of shares/financing structures. Measures the ratio of the stock price of each common share to its earnings per share. Show what investors expect of a company"s future earnings. [higher investors predict increase in earnings, lower investors expect decrease in earnings] High may also suggest that shares are overvalued. Measures % of earnings distributed as cash dividends. Measures earnings generated for the shareholder by each share, based on the market price per share. Higher is better for investors seeking income. How much higher the selling price is than the cogs. Company"s gp expressed as a %, more informative than gp amount. # is % in income, 1-# is cogs. How well the selling price covers all expenses.
