Asset turnover ratio net salesaverage total assets

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Asset Turnover Ratio: Net sales/Average total assets Measures the amount of net sales generated for each dollar invested in assets Rate of Return on total assets: Net Income—Preferred Dividends/ Average total assets Measures how profitably a company used their assets Leverage Ratio: Average total assets/ Average common stockholders’ equity Also known as the equity multiplier Rate of return on common stockholders’ equity: Net income—Preferred dividends/Average common stockholders equity Measures how much income is earned for every dollar invested by the company’s common shareholders Earnings per share of common stock (EPS): Net income—Preferred dividends/ Average number of shares of common stock outstanding Measures the amount of net income earned for each share of the company’s common stock outstanding Ex. $1.72 Measuring Stock for Investment Price-Earnings ratio: Market price per share of common stock/ Earnings per share Indicates the market price of $1 of earnings Dividend yield: Dividend per share of common or preferred stock/ Market price per share of common or preferred stock Shows the percentage of a stock’s market value returned as dividends to the stockholders Book value per share of common stock: Total stockholders’ equity—Preferred equity/ Number of shares of common stock outstanding Indicates the recorded accounting amount for each share of common stock outstanding

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