Ability to use capital to create profit, can be compared with return from other investments, around 15% reasonable for established company, increases in expenses may reduce operating profit and so ROCE
1 of 13
GPM
how successful at generating profits from sales
2 of 13
Capital gearing (investor suitability)
How much of all money invested from loans, increases shareholder risk as interest paid before dividends
3 of 13
EPS
Profitability per share of stock
4 of 13
DPS
Dividends shareholders receive per share
5 of 13
Yield
Earnings generated on investment based on current market value
6 of 13
Price/ earnings ratio
How much bigger market price to current earnings
7 of 13
Current ratio (solvency- ability to pay off short term debts)
Liquid assets to pay off short term debts, should be at least 1.5:1, if falling may be financing investments with short term liabilities, expensive
8 of 13
Acid test ratio
Ignores inventory, should be 1:1
9 of 13
Sales revenue to capital
How business has used capital invested to generate sales
10 of 13
Debt collection- Efficiency (management of assets/ liabilities)
Long= bad for cash flow, could be due to market competition
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