Ratio Analysis.(Part II)ppt - Supplement Materials for...

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2011/4/6 Yu-cheng Chen, NCHU Supplement Materials for Financial Statement Analysis Course Statement Analysis Course FOUNDATIONS OF RATIO AND FINANCIAL ANALYSIS Part II FOUNDATIONS OF FOUNDATIONS OF RATIO AND FINANCIAL ANALYSIS FINANCIAL ANALYSIS Part II 2011/4/6 Yu-cheng Chen, NCHU Profitability analysis Profitability analysis A. Return on Sales 1. Gross Margin 1. Gross Margin 2. Operating Margin 2. Operating Margin 3. Margin Before Interest and Tax 3. Margin Before Interest and Tax 4. Pretax Margin 4. Pretax Margin 5. Profit Margin 5. Profit Margin 6. Contribution Margin 6. Contribution Margin 2011/4/6 Yu-cheng Chen, NCHU 1.Gross 1.Gross Margin Margin Sales Profit Gross = 2.Operating Margin 2.Operating Margin Sales Income Operating = Profitability analysis Profitability analysis 3.Margin Before Interest and Tax 3.Margin Before Interest and Tax Sales EBIT = Yu-cheng Chen, NCHU 2011/4/6 Yu-cheng Chen, NCHU 5. Profit Margin 6.Contribution Margin Sales Income Net = Sales Costs Variable - Sales Sales on Contributi = = 4.Pretax Margin Sales (EBT) Tax Before Earnings = Profitability Analysis Profitability Analysis Yu-cheng Chen, NCHU
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2011/4/6 Yu-cheng Chen, NCHU Profitability analysis Profitability analysis B. Return on Investment 1. Return on Assets (ROA) 1. Return on Assets (ROA) 2. Return on Total Capital (ROTC) 2. Return on Total Capital (ROTC) 3. Return on Equity (ROE) 3. Return on Equity (ROE) 4. Return on Common Equity (ROCE) 4. Return on Common Equity (ROCE) 2011/4/6 Yu-cheng Chen, NCHU 1. 1. Return on Assets Return on Assets (ROA) (ROA) Assets Total Average EBIT Assets Total Average Cost Interest Tax - After Income Net = + = Assets Total Average Sales Sales Cost Interest Tax After Income Net × + = = Profitability × Asset Turnover Profitability Analysis Profitability Analysis Yu-cheng Chen, NCHU 2011/4/6 Yu-cheng Chen, NCHU 2.Return on Total Capital 2.Return on Total Capital Equity) rs' Stockholde Debt (Total Average EBIT + = Profitability Analysis Yu-cheng Chen, NCHU 2011/4/6 Yu-cheng Chen, NCHU 3.Return on Equity (ROE) 3.Return on Equity (ROE) Equity rs' Stockholde Average Income Pretax = Profitability × Equity Turnover Equity Common Average Assets Average Assets Average Income Net × = Asset Return × Leverage Equity Common Average Assets Average Assets Average Sales Sales Income Net × × = = Profitability × Asset Turnover × Financial Leverage Equity Common Average Sales Sales Income Net × = DuPont Analysis Profitability Analysis Yu-cheng Chen, NCHU
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2011/4/6 Yu-cheng Chen, NCHU 4. 4. Return on Common Equity (ROCE) Return on Common Equity (ROCE) Equity Common Average Dividends Preferred Income Net = Equity Common Average Assets Total Average Assets Total Average Dividends Preferred - Income Net × = = Assets Return × Leverage Equity Common Average Assets Total Average Assets Total Average Sales Sales Dividends Preferrred - Income Net × × = × Assets Turnover × Leverage = Gross Margin after Preferred Dividends Profitability Analysis Profitability Analysis Yu-cheng Chen, NCHU 2011/4/6 Yu-cheng Chen, NCHU Operating vs. Financial Leverage Operating vs. Financial Leverage
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Ratio Analysis.(Part II)ppt - Supplement Materials for...

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