1. Profit Margin for ROA
a. Captures the overall profitability of a firms operations and is measured as the amount of
after-tax profit generated (before financing costs) as a percentage of sales.
b. Focuses on all expenses other than interest e
1. Step 4: Project Financial Leverage, Financial Assets, Common Equity Capital, and Financial
a. Projecting Financial Assets
i. For firms that maintain a particular capital structure over time, you can use the
1. Profitability Analysis Based on Various Measures of Income
a. Want to assess how well managers are using the capital they have invested
b. Net income is the key to profitability over other comprehensive income
c. Exhibit that explains the cal
Ch. 1 - Introduction to Accounting Information Systems
Appreciate the complex, dynamic environment in which accounting is practiced.
Know the relationship between the AIS and the organizations business processes.
Know the attributes of information.