Analysis of Financial Statements - Profitability Ratios

5 important questions on Analysis of Financial Statements - Profitability Ratios

What are profitability ratios?

A group of ratios that show the combined effects of liquidity, asset management, and debt on operating results.

What does the ROE ratio measure?

The rate of return on common stockholders' investment

How is the return on invested capital (ROIC) ratio calculated?

EBIT * (1-T)
-------------- = %
debt + equity
  • Higher grades + faster learning
  • Never study anything twice
  • 100% sure, 100% understanding
Discover Study Smart

What does the ROIC ratio measure?

The total return that the company has provided for its investors

How is the basic earning power (BEP) ratio calculated?

EBIT
----------- = %
total assets

The question on the page originate from the summary of the following study material:

  • A unique study and practice tool
  • Never study anything twice again
  • Get the grades you hope for
  • 100% sure, 100% understanding
Remember faster, study better. Scientifically proven.
Trustpilot Logo