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CHAPTER_12_FORMULAE - Minimum acceptable income = Target...

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CHAPTER 12 FORMULAE Return on Investment ROI = Operating income / Total assets ROI = Sales margin * Capital turnover Sales margin = Operating income / Sales Capital turnover = Sales / Total assets Residual Income Residual Income = Operating income – Minimum acceptable income
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Unformatted text preview: Minimum acceptable income = Target rate of return on assets * Total assets Economic Value Added EVA = Income after taxes – Shareholders’ minimum acceptable income Shareholders’ minimum income = WACC * (Total assets – Current liabilities)...
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