The net result is the difference between expenses and income. The higher the return on investment, the more efficient the company is in the use of its resources. It also means that the company can increase its prices. 4. Return on assets Return on assets is another of the profitability indicators that compares the total assets of a company with the amount it returns to its shareholders. The formula to calculate this index is the following: Return on Assets = (Net Income/Total Assets) x 100 The return on total assets ratio indicates the extent to which a company’s investments create value, making it an important measure of company productivity.
Total debt The level of
Indebtness is important for any business, so you must analyze the repercussions of a bank loan or a bond , which will require not only the repayment of the debt but also the Ireland Business Email List payment of interest. To calculate the total debt of a company, the formula is as follows: Total debt = (third party equity/total assets) x 100 This profitability indicator shows us the weight of a company’s debt in relation to its equity. Net cash This is a fundamental indicator, it represents all the sums that can be mobiliz at a given moment, or in the very short term. Link to working capital nes, it is a reliable indicator of the company’s financial health.
Price benefit ratio The
This profitability indicator is especially relevant when it comes to getting investors for the company, since it can reflect the interest of the market in betting on the company’s DP Leads product or service. Among the market value indices, price over earnings is the best known and also the simplest, as it demonstrates the investor’s direct expectation of the asset. Basically, the price/earnings ratio shows how much an investor is willing to pay for each profit made. The formula to calculate this index is the following: Price/Earnings Ratio Asset Price/Asset Earnings.