Академический Документы
Профессиональный Документы
Культура Документы
Profitability
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #2
Net Profit Margin
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #3
Total Asset Turnover
Net Sales
Average Total Assets
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #4
Return on Assets
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #5
DuPont Return on Assets
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #6
DuPont Return on Assets (contd)
FIRM B
Year 1 10% = 4.0% 2.5
Year 2 8% = 3.2% 2.5
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #8
Operating Income Margin
Operating Income
Net Sales
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #9
Operating Asset Turnover
Net Sales
Average Operating Assets
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #10
Return on Operating Assets
Operating Income
Average Operating Assets
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #11
Sales to Fixed Assets
Net Sales
Average Net Fixed Assets
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #12
Return on Investment (ROI)
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #13
Return on Investment (ROI) (contd)
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #14
Return on Total Equity
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #15
Return on Common Equity
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #16
The Relationship Between Profitability
Ratios
Measures
Rate of return to
return on providers of Typical result
Assets All funds Lowest (includes all assets)
Investment Long-term funds Higher than ROA (relative small
amount of short-term funds)
Total equity Equity Higher than ROI (measures return only
to shareholders)
Common equity Common equity Highest
Common shareholders absorb
greatest degree of risk
Requires that return to preferred
shareholders exceed funds paid to
preferred shareholders
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #17
Gross Profit Margin
Gross Profit
Net Sales
Sales
Beginning Inventory
Cost of Goods Sold + Purchases of Inventory
Ending Inventory
= Gross Profit
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #18
Segment Reporting
Operating segments
Separate financial information is available
Evaluated by the chief decision making officer
Geographical information
Revenues earned
Asset concentration
Major customers
Products and services
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #19
Gains and Losses from Prior Period
Adjustments
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #20
Comprehensive Income
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #21
Comprehensive Income (contd)
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #22
Pro Forma Financial Information
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #23
Interim Reports
Copyright 2009 by South-Western, a part of Cengage Learning. All rights reserved. Chapter 8, Slide #24