BEC Ratios (Profitability Ratios) Flashcards Preview

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Flashcards in BEC Ratios (Profitability Ratios) Deck (13):
1

Gross Margin

gross profit / net sales

2

Operating Profit Margin

operating profit / net sales

3

Free Cash Flow

net operating profit after taxes (NOPAT) + depreciation + amortization - capital expenditures - net increase in working capital

4

Residual Income

operating profit - imputed interest on investment

5

Interest on Investment

invested capital x required rate of return

6

Economic Value Added

net operating profit after taxes (NOPAT) - (invested capital x WACC)

7

Cost of Financing

(total assets - total liabilities) x WACC

8

Economic Rate of Return on Common Stock (Total Return)

(dividends + change in price) / beginning price

9

Return on Investment (based on assets)

net income / total assets or avg invested capital

10

Return on Assets

net income / avg total assets

11

Return on Equity

net income / avg stockholders' equity

12

Common Stockholders' Equity

S/E - preferred stock liquidation value

13

Capital Turnover

sales / invested capital